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Science, PseudoScience and Society

Advance of Zombie ideas in XX and XXI centuries

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  Programmers have a very precise understanding of truth. You can’t lie to a compiler. Try it sometime. Garbage in, garbage out. Booleans, the ones and zeros, trues and falses, make up the world programmers live in. That’s all there is! I think programming is deep, it teaches us about the non-cyber universe we live in. There’s something spiritual about computers, and I want to understand it.

Nick Geoghegan

Science has been misused for political purposes many times in history. However, the most glaring examples of politically motivated pseudoscience happened just recently, in XX century. That means that it is useful to review historic examples of "Zombie ideas" used for political purposes and the pattern that defines that abuse.

The important lesson of XX century is that discredited economic and political ideas, no matter how absurd,  don't die as long as they serve well power that be.  In a way they are real living dead, sucking blood from humans.  Those ideas that should have died long ago, still shamble forward, like Zombies. Usage of such ideas is one of the most dangerous deception schemes practiced  by modern elites

It's not easy to write about pseudo science. The problem has to do with the fluid nature of the concept. It has no single, precise meaning and there is little agreement about its constituent elements. But first and foremost it involved subjugation of scientific aims to political goals and deliberate attempt in deception and subsequent cover up. But recently almost all social and economic science became political and all politics involved deception: to say that a politician is not lying is the same as to say that an alcoholic is not drinking. Still there are different degrees of lies and different level of density of the "cloud of deception".

Discredited ideas with political support or "Zombies" can be extremely dangerous for people who oppose them.  Lysenkoism probably represents classic early example when an set of obvious lies was supported by repressive apparatus of state and dissenters were prosecuted and sentenced to Gulag.  For nearly 45 years, the Soviet government used propaganda to foster unproven theories of agriculture promoted by Trofim Lysenko. Scientists seeking favor with the Soviet hierarchy produced fake experimental data in support of Lysenko’s false claims. Contradicting scientific evidence from the fields of biology and genetics was simply banned. University programs taught only Lysenkoism . This state supported attempt to suppress generics  continued for over forty years, until 1964, and even managed to spread to other communist countries, such as  China.

What we saw it as a tragedy in Stalin's Russia genetics, we now see it as a farce in USA economics with neo-classical economics flourishing with the supportive guidance of neoliberal state and financial oligarchy.

The whole neoclassical economics is essentially a set of zombie ideas which are kept in the forefront by financial oligarchy. The financial crisis of 2008 buried key ideas of  'free market liberalism' (aka neoliberalism), such as the 'Efficient Markets Hypothesis', yet these zombie ideas still were dug our, dressed and continue to be sold via major newspapers and journals. Much like Lysenkoism in the USSR by CPSU. See

This is  a real Faustian bargain for academic scholars. One can trade the independence for political influence, good salary and other perks. It is also helps in the power grab. And despite popular image of scientists, they proved to be as corruptible, if not more corruptible, as anybody else. Historically the scientific community is generally held together and all its affairs are peacefully managed through its joint acceptance of the same fundamental scientific beliefs. Science is best practiced in a voluntary, peaceful and free atmosphere.

But that idyllic arrangement firmly belongs to  the past. Now we can talk only about the level of political pressure on scientists via research grants, not so much about presence or absence of such a pressure.  What really matters as far as politics and science is concerned is what type of environment the individual scientists have to work in and what degree of freedom they can enjoy.

Historically the situation changed irrevocably since early XX contrary, which signified discovery of atomic particles.  It should be understood that the modern scientist, built in the modern "neoliberal" democracies, is at the same time - and it is possible that even in the first place - a political agent, a manipulator. For the unwashed masses a public scientist represent the ultimate carrier of truth for a given discipline, so his opinion have a distinct political weight. And the architects of these systems use this values of scientists to the fullest extent possible. Like we can see with neoclassical economics, scientists have turned into an instrument of cognitive manipulation, when  under the guise of science financial oligarchy promote beneficial to itself a false and simplistic picture of the world, which brainwash the masses into "correct" thinking.

In this sense one can say that Lysenkoism represented a natural side effect of  shrinking of freedom of the scientific community and growing influence of political power on science. As by Frederick Seitz noted in his The Present Danger To Science and Society

Everyone knows that the scientific community faces financial problems at the present time. If that were its only problem, some form of restructuring and allocation of funds, perhaps along lines well tested in Europe and modified in characteristic American ways, might provide solutions that would lead to stability and balance well into the next century. Unfortunately, the situation is more complex, made so by the fact that the scientific establishment has become the object of controversy from both outside and inside its special domain. The most important aspects of the controversy are of a new kind and direct attention away from matters that are sufficiently urgent to be the focus of a great deal of the community's attention.

The assaults on science from the outside arise from such movements as the ugly form of "political correctness" that has taken root in important portions of our academic community. There are to be found, in addition, certain tendencies toward a home-grown variant of the anti-intellectual Lysenkoism that afflicted science in the Stalinist Soviet Union. So-called fraud cases are being dealt with in new, bureaucratic ways that cut across the traditional methods of arriving at truth in science. From inside the scientific community, meanwhile, there are challenges that go far beyond those that arise from the intense competition for the limited funds that are available to nourish the country's scientific endeavor.

The critical issue of arriving at a balanced approach to funding for science is being subordinated to issues made to seem urgent by unhealthy alliances of scientists and bureaucrats. Science and the integrity of its practitioners are under attack and, increasingly, legislators and bureaucrats shape the decisions that determine which paths scientific research should take. There is, in addition, a sinister tendency, especially in environmental affairs, toward considering the undertaking of expensive projects that are proposed by some scientists to remedy worst-case formulations of problems before the radical and expensive remedies are proven to be needed. They are viewed seriously though they are based on the advice of opportunistic alarmists in science who leap ahead of what is learned from solid research to encourage support for the expensive remedies they perceive to be necessary. The potential for very great damage to science and society is real.

Of course, the rise of 'Lysenkoism' in the Soviet Union in the late 40th of the twentieth century is one of the most tragic pages of the history of science.  Trofim Lysenko, a Soviet agronomist, came to prominence as the proponent of a theory of heredity that stood in direct opposition to Mendelianism. The details of this theory need not concern us, except to note that it was 'Larmarckist' in its contention that it is possible for organisms to inherit acquired characteristics.  This was wrong and the principles of Mendelianism - the theory of heredity - were well understood by then. But Lysenko theory fitted nicely with the Soviet ideology. Particularly, the idea that acquired characteristics could be inherited held out the promise of the perfectibility of mankind which as strange as it may sound was the necessary precondition to irreversible victory of socialism/communism (later when nationalistic forces  tore apart the USSR  it became clear that such hopes are completely misplaced). 

So the Stalinist state intervened in the pre-exiting scientific struggle by declaring the victor and the consequences, certainly for many of the scientists involved and arguably also for the USSR agriculture, were disastrous.  The essence of Lysenkoism is that pseudo-scientific theory became a pseudo-religious cult and the power of state was used to suppress dissidents. Many scientists were exiled; some killed. Unfortunately we cannot dismiss the obviously pernicious use of ideology by Lysenko and his supporters simply as an aberration of the era that is often brushed aside as 'the cult of personality' (with or without naming the personality in question). This proved to be much more dangerous and at the same time remarkably resilient phenomenon that survived the dissolution of the USSR. Actually the situation repeated with the USA economics when anything that was not neo-classic was suppressed was by-and-large similar although this time this time it happened without any killings.

Do not fool yourself that Lysenkoism is irrevocably connected with communist ideology. The link was poorly accidental. In reality Lysenkoism emerged more like a cult which was extremely convenient for the control freaks in high position in government. It's not a secret that a lot of high-level administrators in academic institutions belong to the category of micromanagers and as such they are naturally predisposed to Lysenkoism.  

In general "Lysenkovisation of  science" occurs when the state tries to control both the methodologies and goals of scientific activity and that happens all over the world, although to different degree.

In the USSR huge bureaucratic institutions such as VASKhNIL and VIEM had been set up with the specific goal to control resources and, especially, scientific press.  Part of the reason that Lysenkoism gained official support in the Soviet Union was because the Mendelian approach to genetics contradicted official ideology, in particular, Engels's dialectical materialism. In early 50th, just before his death Stalin began to sense that Lysenkoism can hinder practical science by interfering with the academic atmosphere of toleration of dissent most conducive to scientific accomplishment. He even went as far as to declare that

“no science can develop and proper without the clash of opinions, without freedom of criticism.”

But it was too late...

Other governments are also far from being immune from this kind of tendency to select between scientific theories on the basis of ideology rather than the balance of evidence.

More benign variant of Lysenkoism that does not rely on the power of the state is usually called Cargo Cult ScienceAnother related term is "Mayberry Machiavellis". A long time ago -- well, actually it was just a year, but it seems like a lot longer than that -- a former Bush advisor John DiIulio got into quite a bit of trouble for revealing to Esquire that the White House did not possess, in any conventional definition of the term, a policy-making process:

...on social policy and related issues, the lack of even basic policy knowledge, and the only casual interest in knowing more, was somewhat breathtaking—discussions by fairly senior people who meant Medicaid but were talking Medicare; near-instant shifts from discussing any actual policy pros and cons to discussing political communications, media strategy, et cetera. Even quite junior staff would sometimes hear quite senior staff pooh-pooh any need to dig deeper for pertinent information on a given issue...

This gave rise to what you might call Mayberry Machiavellis—staff, senior and junior, who consistently talked and acted as if the height of political sophistication consisted in reducing every issue to its simplest, black-and-white terms for public consumption, then steering legislative initiatives or policy proposals as far right as possible.

Dan Gardner - Senior Writer for The Ottawa Citizen writes: "Cabinet meetings were scripted, Mr. O'Neill discovered, by White House staffers who sent advance notes to cabinet secretaries telling them when they were 'supposed to speak, about what, and for how long.'" Is this the shadow of Politburo or what?

There are also strong analogies between Reaganomics and Lysenkoism. Useful discussion is at  "The Financial Crisis and the Systemic Failure of Academic Economics"

The Financial Crisis and the Systemic Failure of Academic Economics, by David Colander, Hans Föllmer, Armin Haas, Michael Goldberg, Katarina Juselius, Alan Kirman, and Thomas Lux: [From the conclusion] ..."We believe that economics has been trapped in a sub-optimal equilibrium in which much of its research efforts are not directed towards the most prevalent needs of society. Paradoxically self-reinforcing feedback effects within the profession may have led to the dominance of a paradigm that has no solid methodological basis and whose empirical performance is, to say the least, modest. Defining away the most prevalent economic problems of modern economies and failing to communicate the limitations and assumptions of its popular models, the economics profession bears some responsibility for the current crisis. It has failed in its duty to society to provide as much insight as possible into the workings of the economy and in providing warnings about the tools it created. It has also been reluctant to emphasize the limitations of its analysis. We believe that the failure to even envisage the current problems of the worldwide financial system and the inability of standard macro and finance models to provide any insight into ongoing events make a strong case for a major reorientation in these areas and a reconsideration of their basic premises."

While at the surface it looks like rent-seeking behavior of dishonest economists the analogy is pretty strong. A broad critique of Neoclassical economics has been put forward in the book Debunking Economics by Steve Keen  See, for example:

Dr. Nikolai Bezroukov


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If history repeats itself...how incapable must Man be of learning from experience

George Bernard Shaw

"No science is immune to the infection of politics and the corruption of power."

Jacob Bronowski (1908-1974),
British scientist, author.
Encounter (London, July 1971).

[Jul 19, 2018] Axiom of Uncertainty by Dan Corjescu

Notable quotes:
"... secular hubris. ..."
"... axiom of uncertainty ..."
"... explanations about everything ..."
"... axiom of uncertainty ..."
"... Indeed, although knowledge is power,; true, absolute knowledge may be unattainable and thus call forth, even demand an attitude of deep humility with respect to the true nature of the universe as a whole and a sharply critical stance towards all publicly held theories, beliefs, and viewpoints. ..."
Jul 10, 2018 | www.counterpunch.org

It's simple. Given that there might well be an absolute nature/structure of the universe and our perhaps fundamentally limited cognitive position/abilities within it can we be certain that we can be sure about the true nature of anything? Can there be fundamental forces, matter, and material relationships of which we will never know?

While unanswerable in principle, the mere possibility of such an epistemological situation has many consequences.

Firstly, it considerably lets out the air out of our current secular hubris.

Science and technology have given us what is perhaps a false impression of our own cognitive and technical omnipotence. While we rightly marvel at what we have achieved during the last five centuries, it does not necessarily give us the right to think that we can, even theoretically, master and understand all that there is.

Would it be so far fetched to think that the human mind, both as it is now and will be in the future, will always be limited in what it can know?

Although we cannot even judge the actual probability of such a proposition it should nevertheless give us pause while constructing brash anthropocentric scenarios which inflate our own importance within the universe.

If we stop to consider the possible theoretical implications of this axiom of uncertainty we will quickly realize that we may never know more than a part, even just a small part of existence past, present, and future.

Of course that does not mean we should stop trying to know all we can.

On the other hand, it does mean that we should be far more circumspect when offering explanations about everything whether scientific, political, or religious.

In each of these domains, we may, it might turn out, be far off the mark.

Yet, the deeper point is that according to the above axiom we can never know for sure.

Do such thoughts open the door then to superstition and fantastical ideas of all kinds?

Yes and no.

Privately, one can believe in whatever one wants to.

However, publicly, the commonly accepted standards of reason, logic, and evidence would still apply.

In order for a proposition such as "Three-eyed pink giraffes eat hamburgers on Titan" to be even remotely true there would have to be substantial scientific research to back it up.

Yet, even if there is credible evidence for totalistic viewpoints of any kind the axiom of uncertainty can always, potentially, call them into question. For if there are indeed fundamental aspects of existence that are forever closed off to us; then it follows that no comprehensive theory of everything could be completely and forever considered true. Such an axiom will always allow for some doubt, however small, to remain.

Indeed, although knowledge is power,; true, absolute knowledge may be unattainable and thus call forth, even demand an attitude of deep humility with respect to the true nature of the universe as a whole and a sharply critical stance towards all publicly held theories, beliefs, and viewpoints.

[Jul 06, 2018] Are there certain things that can't be questioned in a given society, without the risk of destruction of this society?

Sergey Krueger is wrong about questioning of gender roles. That comes from the necessity to to have an identity wedge during neoliberal period of the USA society.
Jul 06, 2018 | www.unz.com

Sergey Krieger , June 16, 2018 at 9:42 am GMT

@Rurik

Well, you put it yourself. Liberalism as is it was during the Enlightenment was questioning all dogmas and everything that is considered normal here we have a double aged sword. When and what you stop questioning and reasoning about logic of certain things.

Logically they started with kings and after all things were questioned they came now to roles of males and females, sex, gender and god forbids where this can takes us.

There are certain things that cannot be questioned for society to have a back bone. A moral and cultural one. Otherwise things turn the way they are now. There is nothing sacred and everything can be questioned and reasoned about.

[Jun 28, 2018] Koch Money and the Unflappable Economist naked capitalism

Notable quotes:
"... By Philip E. Mirowski, Carl Koch Chair of Economics and the History and Philosophy of Science, University of Notre Dame. Originally published at the Institute for New Economic Thinking website ..."
"... Inside Job ..."
"... Philosophy. The neoliberal PR campaign of 'the market is the ultimate and true arbiter of all' has all the appearance of a regression to what I can only call inverted marxist dialectical-materialism as espoused by the old soviets; where anything, even scientific findings, that threatened the supremacy of the doctrine's claim of economic inevitability, was suppressed. ( No wonder the old soviet finally collapsed. ) The neoliberals substitutes a sort of libertarian dialectical-materialism that requires suppression of any theory that contradicts their claim of 'market infallibility' and inevitability. This is dogma, not science or even economics. ..."
Jun 27, 2018 | www.nakedcapitalism.com

Koch Money and the Unflappable Economist Posted on June 27, 2018 by Yves Smith By Philip E. Mirowski, Carl Koch Chair of Economics and the History and Philosophy of Science, University of Notre Dame. Originally published at the Institute for New Economic Thinking website

At the beginning of May 2018, there was a brief furor over donations from Koch family-affiliated philanthropies to fund the Mercatus Institute and the newly-named Antonin Scalia School of Law at George Mason University (GMU). Although articles concerning the admirable efforts of the GMU student organization UnKoch My Campus appeared in many of the prominent news outlets, the attention span of journalists seemed to barely outpace that of interest in one of Donald Trump's tweets, with even less consequence. But more to the point, the silence of the economics profession concerning the revelations was pretty deafening. Briefly, I would like to revisit why this was so and why it matters.

The details of the controversy can be briefly summarized: the assortment of Koch family foundations and allied charitable cutouts (which some libertarians have dubbed the "Kochtopus," but will henceforth here be shortened to 'the Kochs') have been making targeted donations to more than 300 schools since 2005, predominantly to economics departments. But George Mason University has been the most lavishly favored, garnering more than a third of the estimated $150 million bequeathed to universities from 2005-2015. The event that stirred campus resistance at GMU was a massive donation of $10 million from the Kochs tied to a $20 million donation from an anonymous benefactor to rename the Law School after Antonin Scalia, "formally" earmarked for "student scholarships." The first thing one notices was the budgetary legerdemain which obscured the relationship between faculty selection and line items in budgetary terms. Thus, the GMU Provost S. David Wu could tell his Faculty Senate in April 2016 that the bequest came with "no strings attached The entire $30M is for scholarships for students and nothing else." This narrative might have prevailed, if not for the document dump by UnKoch My Campus at the end of April, [1] a result of a FOIA suit by Transparency GMU , which detailed the series of negotiations with the Kochs (including the overwhelming role of figures from the Federalist Society as intermediaries: another Koch funded arm), including stipulations of how designated representatives would have input into GMU hiring decisions. This forced GMU President Angel Cabrera to reverse earlier statements that existing donor arrangements had not been allowed to influence internal academic matters. This, in turn, was the trigger which attracted the national press. As Inside Higher Ed put it: "academic values have long held that donors don't get to pick who holds chairs, or evaluate them."

"It's now abundantly clear that the administration of Mason, in partnership with the Mercatus Center and private donors, violated principles of academic freedom, academic control and ceded faculty governance to private donors," said Bethany Letiecq, President of GMU's chapter of the AAUP. But this reaction might underestimate the scope of the problem, reducing it to a mere matter of moral integrity. I shall argue instead that this event has more structural underpinnings, touching upon the very conception of education in relation to markets, and involve some crucial aspects of economic theory.

Broadly speaking, economists greeted this controversy with a big yawn: this sort of thing happens all the time, so don't get your panties in a twist. Indeed, the Kochs have been making similar grants to many universities for more than a decade, as have other philanthropies. The attitude was that the GMU case was nothing special.

How do economists justify the unflappable lightness of their nonchalance?

First off, many opine that the donors don't really interfere in academic matters; it is just the optics that are less than optimal. There are some crucial details which mitigate this pronouncement when it comes to the GMU case, which are dealt with in a footnote. [2] Nevertheless, in general, most economists are quick to denounce the idea that there are subtle procedural moves attached to donations that substantially alter the practices of universities, as well as the composition of what is taught and researched.

Secondly, for most economists, there are no such things as conflicts of interest, at least when it comes to economic thinking. They regularly declare with ardor that no one is compromising their pronouncements or perverting their beliefs for money. Years ago, I documented this attitude with regard to the culpability of economists for the Great Crash of 2007-8, even in the face of embarrassments such as the scathing portrayal of certain figures in the documentary Inside Job , or the prospect of a code of ethics for economists by the American Economics Association (AEA), a point to which I will return. [3] In the GMU case, the prescription for disclosure was rejected -- hence the need for FOIA requests. The economists generally argued that the people involved had long ago settled upon their personal political beliefs; they were just being selected by the donors to provide a coherent curriculum in "free market doctrine." I shall argue below that this imprecision over the criteria of which doctrines have been selected allow this sense that the ecology of knowledge persists unaltered in the face of concerted Koch intervention.

Third, the orthodox economist would be inclined point out that all potential donors, just like all fledgling academics, possess their own prior interests and convictions, which will be subject to further selection one way or another. It is not the money that makes the difference in the larger scheme of things. As the late Craufurd Goodwin of Duke University used to say, "The only tainted money is the money that t'aint [ sic ] mine." In other words, the sociology of knowledge pretty much works independently of the wishes of any funders involved, since everyone is selfishly scrambling for support. Money as such never taints the well of human inquiry, or so most economists postulate. Of course, one's appreciation for this putative conservation rule might be qualified when one learns that Goodwin had himself been a Program Officer for European and International Affairs under McGeorge Bundy at the Ford Foundation during the Cold War. [4]

Finally, although they might not say this out loud in front of journalists, many economists tend to suspect that all the complaints about the Kochs are just sour grapes, an ideological reaction deriving from the wailers' disdain for the politics of the Koch brothers and their minions. After all, what's so suspicious about wanting to "rectify the bias" of academics hostile to free markets and freedom of speech? That sounds like something most economists would voluntarily support in any event, independent of whomever was fronting the funding. But, just as in the previous cases, this ignores the actual content of the doctrines that the Koch brothers, as well as that of many of their fellow travelers and cooperating philanthropists, [5] seek to promote through their initiatives.

It will come as no surprise to realize that public education is being brutally weaned from state support across the developed world in the recent past, and that private funding has been touted as the deliverance for cash-strapped universities. In this regard, it is pivotal to realize the significance of the fact that George Mason University is a public and not a private university. Far from being a mere shifting of sources of sustenance, this trend itself constitutes one of the prime prescriptions of the political doctrine that motivates the Kochs, namely, neoliberalism. [6] Neoliberalism shouldn't be confused with actual libertarianism; it is predicated upon intervention to bring about the types of government and markets that the neoliberals believe are necessary for the success of capitalism: it just won't happen by itself. One of their central doctrines relevant to the current controversy is their belief that an efficient market is one that processes and validates information, and conveys it to the appropriate agents when and where they need it. Human knowledge is thus first and foremost a market phenomenon.

A direct consequence of this doctrine is that the state should not control public education: the purpose of education is the personal accumulation of human capital, and not the creation of the common denominator of an educated citizenry. Hence many of the major figures of the Neoliberal Thought Collective -- Milton Friedman, James Buchanan, Charles Koch -- long ago proposed that education be "privatized" in most of its various manifestations. Knowledge is paltry if not put up for sale, as they see it. This is the major consideration which dictates that the points at issue at GMU and elsewhere are not merely some symmetrical offsetting response to left wing donations to universities; rather, the whole point of the Koch brothers' intervention is to produce a different kind of university , one which renders government-run education much more responsive to market signals and market dictates. It is a world where people of means can freely buy the kinds of doctrines that they wish to be conveyed to the young, without being coy or ambagious about it. Hence the Koch's doctrines and their philanthropic behaviors are tightly bound into a single package, displaying a coherence not found in the motives of lesser philanthropists. This explains why the Kochs are willing to conduct their negotiations with universities in secret, to carry out their stipulations through cutouts and hard to trace intermediaries and foundations, to package their offers with other rich (and anonymous) donors en banc and to impose conditions upon their bequests that effectively neutralize all previous principles of academic freedom in the long run.

There is a different implication of neoliberal conceptions of knowledge, and that extends to the ideas which constitute the microeconomic orthodoxy. Once information was introduced into the standard pricing model, it was discovered there was no single correct way to formalize epistemology. Through a sequence of different models, the profession moved from the agent as capable of super-cognition, to the portrait of the agent as a flawed vessel for knowledge, offset by a neoliberal notion of the market as super-information processor. [7] Truth became a function of the skewed and arbitrary ability to pay; and consequently, economists were deemed to have possessed superior wisdom concerning whom should get to know what under which circumstances. As self-appointed Engineers of the Human Soul, this reinforced their conviction that there was no need to worry about conflicts of interest, nor indeed, about the increasing prevalence of unashamed mendacity and fake news. [8] Thus, the Koch interventions were therefore regarded as essentially harmless.

Of course, economists would be most interested in the ways this promotes the careers of other economists, but the ambitions of the neoliberal thought collective extends well beyond the social sciences, even unto the realm of the natural sciences. Neoliberalism is supremely hostile to expertise, which is the flip side of its hostility to old-school universities. Hayek denounced intellectuals as 'second-hand dealers in ideas', and modern neoliberals extrapolate that inclination to the limit. In their view, even natural scientists need to learn to subordinate their own research to "the market," and accept that tomorrow the market might devalue their own expertise in favor of the beliefs of less trained participants. "Freedom" is in this instance made manifest as the ability to insert your own 2 cents at will; let the market sort it out. This insight prompts another reconstruction of university life, this time in the direction of so-called 'open science' and 'citizen science'. [9] The literal construction of a 'marketplace of ideas' leads directly to the elevation of the market as the ultimate validator of truth in most dimensions, and the subordination of professional researchers to a less central role, surrounded by platforms that harvest the unremunerated labor of the reserve army of the undereducated. This is creative destruction with a vengeance, which further diminishes the role of the university.

Consequently, while economists tend to think they come equipped to understand all the implications of a thoroughgoing marketplace of ideas, the four conventional ideas sketched above reveal that they currently are far from having a comprehensive appreciation of the "economics of information" as it plays out in the world.

An example of this inadequate approach is a very brief code of professional conduct ratified in April 2018 by the AEA. Its actual wording is significant. It states, "Integrity demands honesty, care and transparency in conducting and presenting research; disinterested assessment of ideas; acknowledgement of the limits of expertise; and disclosure of real and perceived conflicts of interest." [10] There was nothing in the statement proposing that the AEA or any other institution should promote or enforce disclosure, nor indeed define what should be disclosed; it says absolutely nothing at all about "academic freedom." "Integrity" is apparently conceived as personal virtue, although a subsequent paragraph promotes "a professional environment with equal opportunity and fair treatment for all economists." This species of "environment" seems be more concerned with employment of economists than the preservation of academic inquiry as such.

This is why the GMU incident deserves far more scrutiny than it has received from economists, and academics in general.

[1] http://www.unkochmycampus.org/charles-koch-foundation-george-mason-mercatus-donor-influence-exposed

[2] Some sources report the document dump reveals that 'the Kochs' reserved the right of designation of members on faculty selection committees and veto rights in earlier gifts to Mercatus, but in the Scalia School case, the agreement stated that they would have no power over retention or promotion. On this, see https://www.nationalreview.com/2018/05/washington-post-koch-brothers-scoop-falls-apart/ . However, the situation at GMU was far more complex than that, because the emails independently stipulated whom among existing Koch-financed GMU faculty and the Federalist society would make such decisions for the Law School; and furthermore, the Kochs reserved the right to withdraw from the agreement without notice or just cause. Clearly, this Sword of Damocles allowed them to veto any subsequent choices, all the while asserting formally in the document that they unreservedly supported academic freedom. The Kochs, after decades of experience, have gotten good at circumventing faculty who don't understand how the takeover of universities actually works.

[3] See Philip Mirowski, Never Let a Serious Crisis Go to Waste (Verso, 2013), pp. 218-223.

[4] See, for instance, James Petras, "The Ford Foundation and the CIA," at: https://www.ratical.org/ratville/CAH/FordFandCIA.html .

[5] See, for instance, the fascinating case of BB&T: Douglas Beets, "BB&T, Atlas Shrugged, and the ethics of corporation influence on college curricula," Journal of Academic Ethics , 2015, (13):311-344.

[6] This is not the place to explicate fine points of political doctrine. However, see Mirowski, Never Let.. (op. cit.) as well as: https://www.ineteconomics.org/research/research-papers/the-political-movement-that-dared-not-speak-its-own-name-the-neoliberal-thought-collective-under-erasure .

[7] This is described in detail in: Philip Mirowski and Edward Nik-Khah, The Knowledge we Have Lost in Information , (Oxford, 2017).

[8] See, for instance, Matthew Gentzkow & Jesse Shapiro, "Competition and Truth in the Market for News," Journal of Economic Perspectives , (2008) 22:133-154. On his later work, "A reader of our study could very reasonably say, based on our set of facts, that it is unlikely that fake news swayed the election," said Gentzkow. At: https://news.stanford.edu/2017/01/18/stanford-study-examines-fake-news-2016-presidential-election .

[9] For a greater elaboration of this argument, see Philip Mirowski, "The Future(s) of Open Science," Social Studies of Science , 2018 at: http://journals.sagepub.com/doi/abs/10.1177/0306312718772086

[10] https://www.aeaweb.org/about-aea/code-of-conduct


JTMcPhee , June 27, 2018 at 10:39 am

The New Golden Rule: "Them as has the gold (or money and influence) rules." (re-cast to avoid any charge that I am a Gold Bug )

I recall other actions by many sociopathic malefactors of great wealth to control the larger narrative and school curricula through history, like "supporting" the Catholic Church in all its machinations. The Reformation opened the door, along with common understandings of Darwin's notions, to Calvinism. I was bred up in the Presbyterian church, where TULIP blossomed in the young minds of the catechism classes and was reinforced in every bit of the Westminster Fellowship youth group's activities (the Total Depravity proven by all the efforts of young hormone sufferers to get into each others; pants). A pretty sick set of doctrines, http://www.auburn.edu/~allenkc/openhse/calvinism.html , when one gets on a little bit in life, and sees how humans really interact, and how "the Calvinist economics" actually work. https://marketmonetarist.com/2011/10/20/calvinist-economics-the-sin-of-our-times/

So the ho-hum economists and the media midgets are sort of right, at least in pointing out that there's nothing new in what the Kochtopus and all the other wealthy individuals and their "philanthropies" are about. Huge amounts are spent to control the content of Texas lower-grade text books, because as those go, so goes all the curricula of most of the country. http://www.nybooks.com/articles/2012/06/21/how-texas-inflicts-bad-textbooks-on-us/

"If only the people were aware of what is being done to them, they would __________________."

allan , June 27, 2018 at 11:02 am

The fact that the evergreen Glenn Hubbard interview from Inside Job didn't make Hubbard a pariah
in the economics community tells us all we need to know about
the intersectionality of integrity and academic economics.

Patrick , June 27, 2018 at 11:22 am

How ironic that economists are arguing that monetary incentives don't matter.

Larry Motuz , June 27, 2018 at 4:17 pm

Oh, they don't argue that. They know that monetary incentives work. They just don't want to agree that money isn't neutral in terms of what it 'incentivises' any more than does how money is distributed in terms of macroeconomic 'growth'.

This allows them to pretend that money is neutral.

chuck roast , June 27, 2018 at 11:34 am

Back in day, our Economics faculty used to tell us that the study of economics was "value free." What was presented was simply a reflection of real world conditions. No value judgements were to be made. These fellows, like many of our parents, were all deeply scared products of the Great Depression and committed Keynesians (public policy anyone?) to a man. Of course, all we had to do was pick up a copy of Theory of the Leisure Class, and if Veblen's prose didn't hurt our hair to badly, we knew this was a bunch of nonsense.
The worthy successors to this faculty now offer two different Bachelor of Science in Economics degrees. Indeed, the profession has gone entirely through the looking-glass. If we see the past (economic anthropology) or the future (post-capitalism), history will be destroyed. Now we all know that the Red Queen has a cock-eyed head and the royal crown would never fit her. Moreover, the Red Queen ate the stolen tart and is beyond redemption in any case. Are we to believe the Jabberwocky? Is time itself in danger? Can we recapture the Chronosphere? Can we get back through the looking-glass? And if we do, will we all wake up in mental hospitals?

Synoia , June 27, 2018 at 11:49 am

Antonin Scalia School of Law at George Mason University

Hmm.. ASSoL at George Mason University.
Can these people be that stupid?
I'm enrolled in ASSoL at GMU, or
I'm an ASSoL Graduate

One could not have chosen a better name working for Monty Python.

Secondly, for most economists, there are no such things as conflicts of interest,

Because each item, pronouncement, thesis, or work product is to ensure the Economist's Master that their view of the universe is correct, then, obviously there is no Conflict of Interest.

Moe N. DeLawn , June 27, 2018 at 4:01 pm

The internet already got to that.

They changed it to the Antonin Scalia Law School in response .

teacup , June 27, 2018 at 2:21 pm

"The Corruption of Economics" by Mason Gaffney dives deep into this. "False Education in our Colleges and Universities" by Emil O. Jorgensen referenced within this gem gives an example – ' in the 1924 Professor Richard T. Ely was the director of the Institute for Research in Land Economics and Public Utilities at the University of Wisconsin at Madison but relocated over questions of it being entirely financed by certain corporations and economic groups seeking to have privilege and monopoly taxed less and industry and consumption taxed more Although it was denied that the removal of Prof. Ely was in any way due to compulsion, it is a curious fact that no sooner had Prof. Ely gone than the Board of Regents voted that no more money "shall in the future be accepted by or in behalf of the University of Wisconsin from any incorporated educational endowments or organizations of like character." But Prof. Ely with his old-time shrewdness and skill had dodged the descending ax. Suspecting evidently that such a resolution would sooner or later be passed, the Professor began in the early part of the year to cast about for a safe place to escape and picked out as his refuge Northwestern University in Evanston – a privately endowed institution noted for its conservatism and its close affiliation with the powers that be Having definitely laid his plans Prof. Ely then added Frank O. Lowden (former governor of Illinois) and Nathan W. MacChesney (General Counsel for the National Association of Real Estate Boards as well as a trustee of Northwestern University) to his own board of trustees Very grateful for the welcome extended to him by Northwestern University, Prof. Ely commences his activities in that institution with larger plans, wider ambitions and a harder determination than ever to build up a great national machine that will promote, under the cloak of "disinterested research," not the welfare of all, but the special interests of a few '

Left in Wisconsin , June 27, 2018 at 6:23 pm

Ely had a complicated history. Business interests tried to drive him out of the Univ of Wisconsin in the 1890s not because he was a corrupt neoclassical economist but because he was argued to be a socialist. (He wasn't.) He was responsible for bringing JR Commons, one of the great institutional economists, to Wisconsin and at least partly responsible for the quality of the economics faculty at Wisconsin that developed in the 1910s many of the state programs (unemployment insurance, workers compensation) that ultimately became models for the New Deal.

But he became more right-wing as he got older. He campaigned to have Robert LaFollette removed from the Senate because LaFollette was anti-WW1 and then went off to Northwestern as a pretty conventional rightwing economist.

Interestingly, a number of pro-labor New Deal economists followed a similar trajectory. For example, Leo Wolman.

flora , June 27, 2018 at 4:38 pm

Thanks very much for this post. This has been playing out at my uni for some time now.

2 thoughts:

Money. The Kochs certainly appear to hate taxes almost as much as regulation. Public universities and colleges require adequate funding from the public(taxes) to support the mission of education – as opposed to just training.

A good education requires good teachers; professors who are paid well enough to make a career in academia – not a king's ransom but not a church mouse salary either – and the freedom to research into all areas.

So, the neoliberals get a huge tax cut passed in states and at the federal level; then claim there's not enough state/federal money to support higher ed (please, no MMT talk here, I'm making a different point); as higher ed struggles financially, pretend to be a white knight riding in with grant money to save the day. It's cheaper than taxes for the grantors, since the "white knight" controls how much and how often they give money. And, it gives them leverage over the curriculum. There are many tricks to claim a "chaired" position isn't "really in the department", so the grants are "not changing the quality of education" they will argue. It's a vicious financial circle for higher ed .

Philosophy. The neoliberal PR campaign of 'the market is the ultimate and true arbiter of all' has all the appearance of a regression to what I can only call inverted marxist dialectical-materialism as espoused by the old soviets; where anything, even scientific findings, that threatened the supremacy of the doctrine's claim of economic inevitability, was suppressed. ( No wonder the old soviet finally collapsed. )
The neoliberals substitutes a sort of libertarian dialectical-materialism that requires suppression of any theory that contradicts their claim of 'market infallibility' and inevitability. This is dogma, not science or even economics.

Just my opinion, of course.

Summer , June 27, 2018 at 5:30 pm

We're about to get to see Koch money and the unflappable Supreme Court Judges.

greg , June 27, 2018 at 11:38 pm

People who are paid to think, think what they are paid to think.

The Kochs, and those like them, seem to labor under under the delusion that reality will conform to their beliefs. Since they are powerful, they are able to inflict this delusion on society.

The return to the real world from the world of delusion is always extremely costly. We will all pay.

[Jun 15, 2018] Creationists and George W Bush: Bush junior is the best argument against intelligent design

Jun 15, 2018 | www.unz.com

AnonFromTN ,

There are many other clear traces of evolution (constantly developing antibiotic resistance of disease-causing bacteria being one of the most obvious), but the funniest argument for evolution I know is this: "Bush junior is the best argument against intelligent design: nobody intelligent would ever design that".

[Jun 12, 2018] An article about the Krugman tweets

Jun 12, 2018 | crooksandliars.com

I am copying in the first 2 that show the economic clarity he brings to the subject and make my point

Paul Krugman
It's normal to feel that people you disagree with politically are offering bad solutions to our problems. But Trump has brought something new: his policy agenda is almost entirely directed at problems we don't have -- problems that exist only in his warped imagination 1/

Paul Krugman
These include:
- A wave of violent crime by undocumented immigrants
- Massive illegal voting by the same
- Massive Canadian tariffs against US goods
- Conspiracy by the Elders of Zion to take over the world

OK, he hasn't actually gone after point #4, but give him time 2/

End of Paul Krugman tweet quote

So why did Krugman write about the Elders of Zion (What does he know and when did he find out?..grin) and not about the proclivities of global private finance?.....that pays him nicely to be part of propaganda central

Posted by: psychohistorian | Jun 10, 2018 10:40:00 PM | 17

[Jun 06, 2018] Neoliberal Economics has a lot of similarities with Theology

Jun 06, 2018 | discussion.theguardian.com

Carlosthepossum -> innercity leftie , 3 Jun 2018 19:10

Economics has a lot of similarities with Theology.
People can believe whatever interpretation fits with their own indoctrination.
The difference being there is a truth to economics that seems to be invisible to most people, major economists included.
Your post highlights some of the stark realities that people just refuse to accept for some inexplicable reason.
Maybe the better economic managers will come to the rescue or maybe there will be a collective awakening when in a moment of clarity we start to realise how badly we have been conned.

[Jun 03, 2018] Economist's View Is GDP Overstating Economic Activity

Notable quotes:
"... Economic Letter ..."
"... Economic Letter ..."
"... Journal of Econometrics ..."
"... Brookings Papers on Economic Activity ..."
"... FRBSF Economic Letter ..."
"... Brookings Papers on Economic Activity ..."
"... Journal of Money, Credit, and Banking ..."
"... Opinions expressed in FRBSF Economic Letter do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System. ..."
Jun 03, 2018 | economistsview.typepad.com

Is GDP Overstating Economic Activity? From an Economic Letter at the FRBSF:

Is GDP Overstating Economic Activity?, by Zheng Liu, Mark M. Spiegel, and Eric B. Tallman : Two common measures of overall economic output are gross domestic product (GDP) and gross domestic income (GDI). GDP is based on aggregate expenditures, while GDI is based on aggregate income. In principle, the two measures should be identical. However, in practice, they are not. The differences between these two series can arise from differences in source data, errors in measuring their components, and the seasonal adjustment process.
In this Economic Letter , we evaluate the reliability of GDP relative to two alternatives, GDI and a combination of the two known as GDPplus, for measuring economic output. We test the ability of each to forecast a benchmark measure of economic activity over the past two years. We find that GDP consistently outperforms the other two as a more accurate predictor of aggregate economic activity over this period. This suggests that the relative weakness of GDI growth in recent years does not necessarily indicate weakness in overall economic growth.
Discrepancies between GDP and GDI
What drives the discrepancies between GDP and GDI is not well understood. The source data for the components that go into GDP and GDI are measured with errors, which may lead to discrepancies between the two. Further discrepancies can arise because those different components are adjusted for seasonality at different points in time (see, for example, Grimm 2007).
The differences between these two series can be large. For example, in the last two quarters of 2007, inflation-adjusted or "real" GDI was declining whereas real GDP was still growing. The year-over-year growth rate of GDP exceeded that of GDI by almost 2.6 percentage points. Over long periods, however, final measures of growth in GDP and GDI tend to yield roughly equivalent assessments of economic activity. Since 1985, real GDP grew at an average annual rate of about 3.98%, while real GDI grew at a similar average rate of 4.02%.
Since late 2015, the two series have diverged, with real GDP growth consistently exceeding real GDI growth (Figure 1). The differences in growth are significant in this period. For example, if we used GDI growth to assess overall economic activity since July 2015, then the size of real aggregate output by the end of 2017 would be $230 billion smaller than if GDP growth were used. This divergence between the two sends mixed signals regarding the strength of recent economic activity.

Figure 1
Mixed signals from GDP and GDI growth

2018-14-1

Source: Bureau of Economic Analysis.

Evaluating GDP, GDI, combination
Researchers often debate which of these series measures economic activity more accurately. Nalewaik (2012) argues that GDI outperforms GDP in forecasting recessions. GDI does appear to exhibit more cyclical volatility than GDP. One reason may be that GDI is more highly correlated with a number of business cycle indicators, including movements in both employment and unemployment (Nalewaik 2010). On the other hand, the Bureau of Economic Analysis has resisted this conclusion, arguing that GDP is in general based on more reliable source data than GDI is (Landefeld 2010).
To evaluate the relative reliability of GDP versus GDI for measuring economic output, we compare their abilities to forecast a benchmark measure of economic activity. We focus on the Chicago Fed National Activity Index (CFNAI) as the benchmark, since it is publicly available. The CFNAI is a monthly index of national economic activity, generated as the common component of 85 monthly series in the U.S. economy. These underlying series include a wide variety of data covering production and income, employment and unemployment, personal consumption and housing, and sales and orders. The CFNAI has been shown to help forecast real GDP (Lang and Lansing 2010). We use the CFNAI as a benchmark activity indicator to evaluate the relative forecasting performances of GDP and GDI and their combinations. Since the discrepancy between these two series has persisted for several years, we focus on the final releases of the GDP and GDI series.
Some have argued that, because the GDP and GDI series contain independent information, it may be preferable to combine the two series into a single more informative activity indicator. One series that uses such a combination is the Philadelphia Fed's GDPplus series, which is a weighted average of GDP and GDI, with the weights based on the approach described by Aruoba et al. (2016). As a weighted average, GDPplus indicates activity levels between the two individual series. We therefore also consider the forecasting performance of the GDPplus series over this period of extended discrepancy between reported GDP and GDI growth.
To confirm the accuracy of our approach, we repeated our investigation with two alternative series constructed using methodologies similar to the CFNAI. The first alternative is an aggregate economic activity index (EAI) we constructed by extracting the common components of 90 underlying monthly time series. The EAI covers a broader set of monthly indicators than the CFNAI, since we also include information from goods prices and asset prices.
The second alternative indicator we considered is an activity index constructed by Barigozzi and Luciani (2018), which we call the BL index. Like our index, the BL index includes price indexes and other measures of labor costs. The authors base their estimates on the portions of GDP and GDI that are driven by common macroeconomic shocks under the assumption that they have equivalent effects on GDP and GDI. This restriction implies that deviations between GDP and GDI are transitory, and that the two series follow each other over time.
The EAI and the BL index are both highly correlated with the CFNAI and thus yielded similar conclusions. We describe the source data and our methodology for constructing the EAI as well as the analysis using both it and the BL index in an online appendix .
Empirical results
To examine the relative performances of GDP, GDI, and GDPplus for forecasting the CFNAI, we first estimate an empirical model in which the CFNAI is related to four lagged values of one of these measures of aggregate output. Ideally, we would have used the full sample of postwar data in our model, but there are some structural breaks in the data related to factors such as changes in the monetary policy regime since the mid-1980s and the Great Moderation that make this challenging. We therefore choose to focus on the sample starting from the first quarter of 1985 in this discussion; our results using the full sample are similar, as we report in the online appendix .
To examine how well each of the measures of aggregate output are able to forecast the CFNAI, we estimate the model using the sample observations up to the end of 2015, the period before GDP and GDI diverged. Once we determine the estimated coefficients that describe each relationship, we use those values to estimate forecasts for the period when discrepancies developed, from the first quarter of 2016 to the end of 2017. We then calculate the prediction errors, measured by the root mean-squared errors, for each measure of aggregate output. The smaller the prediction error, the better the forecasting performance.
In addition to examining the forecasting performance of GDP, GDI, and GDPplus for predicting the CFNAI economic activity indicator, we also examined their forecasting performance for the unemployment rate as reported by the Bureau of Labor Statistics.
Figure 2 displays the prediction errors from 2016 to 2017 for each of the alternative output measures -- GDP, GDI, and GDPplus -- estimated from our model for CFNAI and unemployment. For ease of comparison, we normalize the prediction errors from the model with GDP to one. The figure shows that the prediction errors over this period based on the GDP series are substantively lower than those based on GDI or GDPplus. This finding holds true not just for these proxies for economic activity but also for our EAI and the BL index (see the online appendix ). Moreover, formal statistical tests of forecasting performance indicate that the forecasts based on GDP are significantly better than those based on GDI or GDPplus at the 95% confidence level. This result suggests that, in recent periods, GDP has been a more reliable independent indicator of economic activity than either GDI or GDPplus.

Figure 2
GDP outperforms GDI, GDPplus in predicting activity

2018-14-2

Note: Figure shows prediction errors with GDP indexed to 1.

Conclusion
While GDP and GDI are theoretically identical measures of economic output, they can differ significantly in practice over some periods. The differences between the two series have been particularly pronounced in the past two years, when GDP growth has been consistently stronger than GDI growth. Based on this observation, some analysts have claimed that GDP might be overstating the pace of growth and that GDI, or some combination of GDP and GDI, should be used to evaluate the levels and growth rate of economic activity.
To evaluate the validity of this claim, we compared the relative performances of GDP, GDI, and a combined measure, GDPplus, for forecasting the CFNAI, which we use as a benchmark measure of economic activity over the past two years. We find that GDP consistently outperforms both GDI and combinations of the two, such as GDPplus, in forecasting aggregate economic activity during the past two years. In this sense, GDP is a more accurate predictor of aggregate economic activity than GDI over this period. Therefore, the relative weakness of GDI growth observed in recent years does not necessarily indicate weakness in overall economic growth.
Zheng Liu is a senior research advisor in the Economic Research Department of the Federal Reserve Bank of San Francisco.
Mark M. Spiegel is a vice president in the Economic Research Department of the Federal Reserve Bank of San Francisco.
Eric B. Tallman is a research associate in the Economic Research Department of the Federal Reserve Bank of San Francisco.
References
Aruoba, S. Boragan, Francis X. Diebold, Jeremy Nalewaik, Frank Schorfheide, and Dongho Song. 2016. "Improving GDP Measurement: A Measurement-Error Perspective." Journal of Econometrics 191(2), pp. 384–397.
Barigozzi, Matteo, and Matteo Luciani. 2018. "Do National Account Statistics Underestimate U.S. Real Output Growth?" Board of Governors FEDS Notes , January 9.
Grimm, Bruce T. 2007. "The Statistical Discrepancy." Bureau of Economic Analysis Working Paper 2007-01, March 2.
Landefeld, J. Steven. 2010. "Comments and Discussion: The Income- and Expenditure-Side Estimates of U.S. Output Growth." Brookings Papers on Economic Activity , Spring, pp. 112–123.
Lang, David, and Kevin J. Lansing. 2010. "Forecasting Growth Over the Next Year with a Business Cycle Index." FRBSF Economic Letter 2010-29 (September 27).
Nalewaik, Jeremy J. 2010. "The Income- and Expenditure-Side Estimates of U.S. Output Growth." Brookings Papers on Economic Activity , Spring, pp. 71–106.
Nalewaik, Jeremy J. 2012. "Estimating Probabilities of Recession in Real Time Using GDP and GDI." Journal of Money, Credit, and Banking 44, pp. 235–253.

Opinions expressed in FRBSF Economic Letter do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System.


Paine , May 29, 2018 at 06:32 PM

Love to read stuff like this


Refining methods of data collection and aggregation

Why ?

Irony

Paine -> Paine ... , May 29, 2018 at 06:34 PM
Vickrey macro ...NOW.
anne -> Paine ... , May 29, 2018 at 06:44 PM
Fine, "Vickrey macro," but every time that is asserted there needs to be a reference to a clear summary statement of what that means. A Wikipedia reference would do, but the assertion has almost no influence unless made immediately, simply meaningful.

Just one simple reference summary will do, continually repeated.

Gibbon1 -> anne... , May 30, 2018 at 01:18 AM
Read this. Fifteen Fatal Fallacies of Financial Fundamentalism. A Disquisition on Demand Side Economics

http://www.columbia.edu/dlc/wp/econ/vickrey.html

anne -> Gibbon1... , May 30, 2018 at 08:17 AM
http://www.columbia.edu/dlc/wp/econ/vickrey.html

October 5, 1996

Fifteen Fatal Fallacies of Financial Fundamentalism
A Disquisition on Demand Side Economics
By William Vickrey

[ I appreciate this reference, which I will read carefully. ]

anne -> Gibbon1... , May 30, 2018 at 11:16 AM
Summary:

http://www.columbia.edu/dlc/wp/econ/vickrey.html

October 15, 1996

Fifteen Fatal Fallacies of Financial Fundamentalism
A Disquisition on Demand Side Economics
By William Vickrey

Much of the conventional economic wisdom prevailing in financial circles, largely subscribed to as a basis for governmental policy, and widely accepted by the media and the public, is based on incomplete analysis, contrafactual assumptions, and false analogy. For instance, encouragement to saving is advocated without attention to the fact that for most people encouraging saving is equivalent to discouraging consumption and reducing market demand, and a purchase by a consumer or a government is also income to vendors and suppliers, and government debt is also an asset. Equally fallacious are implications that what is possible or desirable for individuals one at a time will be equally possible or desirable for all who might wish to do so or for the economy as a whole.

And often analysis seems to be based on the assumption that future economic output is almost entirely determined by inexorable economic forces independently of government policy so that devoting more resources to one use inevitably detracts from availability for another. This might be justifiable in an economy at chock-full employment, or it might be validated in a sense by postulating that the Federal Reserve Board will pursue and succeed in a policy of holding unemployment strictly to a fixed "non-inflation-accelerating" or "natural" rate. But under current conditions such success is neither likely nor desirable.

Some of the fallacies that result from such modes of thought are as follows. Taken together their acceptance is leading to policies that at best are keeping us in the economic doldrums with overall unemployment rates stuck in the 5 to 6 percent range. This is bad enough merely in terms of the loss of 10 to 15 percent of our potential production, even if shared equitably, but when it translates into unemployment of 10, 20, and 40 percent among disadvantaged groups, the further damages in terms of poverty, family breakup, school truancy and dropout, illegitimacy, drug use, and crime become serious indeed. And should the implied policies be fully carried out in terms of a "balanced budget," we could well be in for a serious depression.

Fallacy 1

Deficits are considered to represent sinful profligate spending at the expense of future generations who will be left with a smaller endowment of invested capital. This fallacy seems to stem from a false analogy to borrowing by individuals.

Fallacy 2

Urging or providing incentives for individuals to try to save more is said to stimulate investment and economic growth. This seems to derive from an assumption of an unchanged aggregate output so that what is not used for consumption will necessarily and automatically be devoted to capital formation.

Fallacy 3

Government borrowing is supposed to "crowd out" private investment.

Fallacy 4

Inflation is called the "cruelest tax." The perception seems to be that if only prices would stop rising, one's income would go further, disregarding the consequences for income.

Fallacy 5

"A chronic trend towards inflation is a reflection of living beyond our means." Alfred Kahn, quoted in Cornell '93, summer issue.

Fallacy 6

Fallacy 7

Many profess a faith that if only governments would stop meddling, and balance their budgets, free capital markets would in their own good time bring about prosperity, possibly with the aid of "sound" monetary policy. It is assumed that there is a market mechanism by which interest rates adjust promptly and automatically to equate planned saving and investment in a manner analogous to the market by which the price of potatoes balances supply and demand. In reality no such market mechanism exists; if a prosperous equilibrium is to be achieved it will require deliberate intervention on the part of monetary authorities.

Fallacy 8

If deficits continue, the debt service would eventually swamp the fisc.

Fallacy 9

The negative effect of considering the overhanging burden of the increased debt would, it is claimed, cancel the stimulative effect of the deficit. This sweeping claim depends on a failure to analyze the situation in detail.

Fallacy 10

The value of the national currency in terms of foreign exchange (or gold) is held to be a measure of economic health, and steps to maintain that value are thought to contribute to this health. In some quarters a kind of jingoistic pride is taken in the value of one's currency, or satisfaction may be derived from the greater purchasing power of the domestic currency in terms of foreign travel.

Fallacy 11

It is claimed that exemption of capital gains from income tax will promote investment and growth.

Fallacy 12

Debt would, it is held, eventually reach levels that cause lenders to balk with taxpayers threatening rebellion and default.

Fallacy 13

Authorizing income-generating budget deficits results in larger and possibly more extravagant, wasteful and oppressive government expenditures.

Fallacy 14

Government debt is thought of as a burden handed on from one generation to its children and grandchildren.

Fallacy 15

Unemployment is not due to lack of effective demand, reducible by demand-increasing deficits, but is either "structural," resulting from a mismatch between the skills of the unemployed and the requirements of jobs, or "regulatory", resulting from minimum wage laws, restrictions on the employment of classes of individuals in certain occupations, requirements for medical coverage, or burdensome dismissal constraints, or is "voluntary," in part the result of excessively generous and poorly designed social insurance and relief provisions.

anne -> anne... , May 30, 2018 at 11:17 AM
Correcting omission:

Fallacy 6

It is thought necessary to keep unemployment at a "non-inflation-accelerating" level ("NIARU") in the range of 4% to 6% if inflation is to be kept from increasing unacceptably.

point -> anne... , May 30, 2018 at 01:02 PM
Very nice. Once again, it turns out a number of my great new ideas are someone else's previously solved problems.
anne -> point... , May 30, 2018 at 02:00 PM
Once again, it turns out a number of my great new ideas are someone else's previously solved problems.

[ I like this. ]

mulp said in reply to anne... , May 30, 2018 at 03:33 PM
"Deficits are considered to represent sinful profligate spending at the expense of future generations who will be left with a smaller endowment of invested capital. This fallacy seems to stem from a false analogy to borrowing by individuals."

Except, we do not say a worker with $1000 a week income buying a $100,000 home first week in May ran a $99,200 deficit (still needed food and gas) that week.

But government might run a $10 billion per week deficit from paying workers to build infrastructure that will last a century plus with maintenance which will be repaid with higher taxes over the next 50 years plus higher taxes for operations,....

Or the $10 billion per week deficit might be from ending all infrastructure building and slashing spending on operations so a $11 billion per week tax cut could be implemented ($1 billion in taxes to repay and operate the infrastructure being built at $10 billion per week).

Households and businesses maintain four ledgers, one pair is income and expense, and the other is assets and liabilities. Buying a car, house, factory or car is not an expense, but an addition to assets with offsetting liability. They are expensed over time as depreciation. Excess income over expense is added to assets, in a cash account. Paying cash for an asset moves the value from one part of the asset ledger, unless you have a separate fund for emergency or retire and you borrow from it to pay for the car creating two new entries, a liability for borrowing your money offset by the asset car.

I did this in the 60s and 70s with a ledger I then punched on IBM cards so I could create multiple reports from one set of transactions, like a business. In the 90s, I did this for a year or two with Quicken. It was not part of the "quick" entry and report which was more like a check register, but it had all the options for asset and liability ledgers, with tied entries between ledgers, mostly focused on investment accounts. It lacked a comprehensive asset ledger function to tally house, car, truck, boat, home theater, cabin, and then depreciate them, but I'm guessing QuickBooks has these functions.

For the Federal government, and State governments, many assets are on the books of local government or government subunits, but finance by a bigger government. For example, NH State government funds building most of new schools out of a cash account, while half a century ago, a local government would hike a tax to fund issuing a bond, which means the State mandated school was easy to fund for the rich towns, but almost impossible for poor towns with very low tax base. Once moved to the conservative State level, issuing tax backed bonds became politically difficult.

In the 60s, government debt was for building assets and bonds had tax revenue streams to repay them. But conservatives hated the investment part of government because while it meant jobs, it also required taxes.

For example, the highway trust fund was based on taxes to fill it to pay States to pay workers. If a bunch of States wanted more jobs, that led to higher taxes.

Social Security Trust funds are based on an investment asset and liability model. The assets are the current and future workers plus trust funds and the liabilities are current and future beneficiaries being paid and to be paid. The Trustees report on these two ledgers annually, along with income and expense. For a number of years, they have reported the liabilities are growing slightly faster than assets.

But the rise of free lunch economics that basically rejects capitalism and it's accounting, simply call liabilities the FICA revenue and the expenses and claim there are no SS assets.

Progressives seem to live hand to mouth, rejecting capitalist principles.

pgl -> anne... , May 30, 2018 at 05:53 AM
Here you go Anne:

http://www.columbia.edu/dlc/wp/econ/vickrey.html

Of course Paine is either too lazy or too arrogant to provide a link to what William Vickrey wrote.

Or maybe he enjoys misrepresenting what his own guru had to say. He does seem to just babble on.

Teapot -> pgl... , May 30, 2018 at 06:49 AM
Who hurt you pgl?
RC AKA Darryl, Ron said in reply to Teapot... , May 30, 2018 at 08:15 AM
:<)
Christopher H. said in reply to pgl... , May 30, 2018 at 08:04 AM
Misrepresenting everything is what you do. You sure do project a lot. You're a whole bundle of neuroses.
kurt -> Christopher H.... , May 30, 2018 at 03:08 PM
You make claims like this all the time. Without a shred of evidence. Why don't you SPECIFICALLY point to a time when you think pgl misrepresented something.

You did this for me once, and it became instantly clear that you cannot read - or at least read things into comments that are not there. What did pgl misrepresent. Waiting.

Paine -> anne... , May 30, 2018 at 06:51 AM
Anne. You are absolutely right

I've stopped linking to his work

Wild Bill
Is best viewed thru his presidential address to the economists of the AEA

Paine -> Paine... , May 30, 2018 at 06:53 AM
However willful misreading
And misconstruing
is never useful commentary

Not that attaching a firecracker
To a goat's or a cows or a pigs tail
isn't good old farm yard fun

RC AKA Darryl, Ron said in reply to Paine... , May 30, 2018 at 08:16 AM
:<)
anne -> Paine... , May 30, 2018 at 08:22 AM
Vickrey
Is best viewed thru his presidential address to the economists of the AEA

[ Having looked unsuccessfully, I need a precise reference. ]

anne -> anne... , May 30, 2018 at 08:24 AM
This essay is about the Vickrey AEA address, but does not serve as a summary of the macroeconomics:

http://works.bepress.com/cgi/viewcontent.cgi?article=1027&context=timothy_canova

March, 1997

The Macroeconomics of William Vickrey
By Timothy A. Canova

anne -> anne... , May 30, 2018 at 08:25 AM
Another possibility, but a summary is still needed:

http://community.middlebury.edu/~colander/articles/Vickrey-latest%20latest.pdf

January 4, 1998

Was Vickrey 10 Years Ahead of the Profession in Macro?
By David Colander (Middlebury College)

Paine -> anne... , May 30, 2018 at 08:33 AM
Anne

My daughter is planning a web site
To present in integrated form
Kalecki Lerner and Vickrey

KLV MACRO

I'M MERELY A CONSULTANT OF COURSE
PART ONE WILL BE VICKREY CHOCK.FULL EMPLOYMENT
AND THE END TO CONTRIVED JOB SCARCITY

pgl -> Paine... , May 30, 2018 at 11:06 AM
Give us the cite when she does. Maybe she will be a lot clearer than her old man. Let's hope so.
Paine -> anne... , May 30, 2018 at 09:15 AM
This is a good introduction to wild Bill


anne -> Paine... , May 30, 2018 at 10:07 AM
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.172.5394&rep=rep1&type=pdf

July, 1999

Saving-Recycling Public Employment: An Assets-Based Approach To Full Employment and Price Stability
By Mathew Forstater

William Vickrey's single-minded commitment to full employment is evident in a series of papers written in the last years of his life....

[ All I wish is a clear summary that takes me to the essence and relevance of Vickrey's ideas, but this paper also seems wanting. ]

pgl -> anne... , May 30, 2018 at 11:05 AM
Vickrey wrote on a wide range of topics besides macroeconomics. Now he also had certain progressive Keynesian views, which I share. Of course I'm not into the mindless name dropping that Paine is into. I would rather actually read what economists wrote. A couple of us provided the 1996 Fifteen Fallacies paper he wrote which is an excellent read.

I do wonder if Paine himself ever bothered to read it as he sure has never bothered to explain what it said.

Christopher H. said in reply to pgl... , May 30, 2018 at 06:58 PM
"Of course I'm not into the mindless name dropping that Paine is into."

LOL all you do is name drop and kiss up and kick down!

You're the worst of that type of person!

anne -> Paine... , May 30, 2018 at 10:13 AM
Vickrey
Is best viewed thru his presidential address to the economists of the AEA

[ I have again looked but cannot find the address. I am saddened at my inability, but will pass on. ]

Paine -> anne... , May 30, 2018 at 11:02 AM
Anne do you agree with what you have read about Vickrey macro
Do you have any questions
Paine -> Paine... , May 30, 2018 at 11:06 AM
Note these key goals.

A Beveridge ratio :

(Job openings to job seekers )

Greater then one to one

Ie where firms
are looking
For more hires
then there are
potential hires looking for jobs

Paine -> Paine... , May 30, 2018 at 11:08 AM
Vickrey called
getting immediately
to this beveridge ratio
on Job markets
And remaining there

a social imperative

Paine -> Paine... , May 30, 2018 at 11:10 AM
Inflation is no excuse
If inflation accelerates

Impose price control mechanism
a la Lerner map
Make it work
No return to high unemployment
Like volckerism demands

Paine -> Paine... , May 30, 2018 at 11:12 AM
Key distinction between
Vickrey
and the job guarantee program
These are market mediated non government jobs

Not a works project administration
rebirth

Paine -> Paine... , May 30, 2018 at 11:14 AM
Vickrey macro ises fiscal deficits
not interest rate and credit flow
As thr demand injector instrument
anne -> Paine... , May 30, 2018 at 11:54 AM
Yes, I agree with the ideas of Vickrey and can use my abstract of the 15 fallacies as a guide. I am pleased. The post below can then be linked to in future...
pgl -> Paine ... , May 30, 2018 at 05:49 AM
Leave it to you to confuse a measurement issue with a modeling issue. Babble on!
Gibbon1 -> pgl... , May 30, 2018 at 06:55 PM
Last night found and read the Vickrey reference. Made a bet with myself that the toxic troika's response would be to hurl low quality insults and disrupt.

I owe myself a beer.

Christopher H. said in reply to Gibbon1... , May 30, 2018 at 06:59 PM
"the toxic troika's response would be to hurl low quality insults and disrupt."

It's like clockwork.

point , May 30, 2018 at 05:55 AM
Would be interesting for feminist economists to weigh in on measurement and modeling error.
pgl -> point... , May 30, 2018 at 11:08 AM
I'm sure there is some humor here but be careful as some gals might take offense at this!
Paine -> point... , May 30, 2018 at 11:16 AM
Housework is not included

We need to pay a domestic wage

Women on average do 20 hours of domestic work men about 8 as I recall surveys indicate

anne -> Paine... , May 30, 2018 at 12:03 PM
Looking to housework in China, and how it has been radically changed with development, I realize to my surprise that per capita GDP growth and distribution of income surely measures housework. A house with electricity alone allows for a revolution in housework. Detergent (non-phosphate) works wonders...
point -> Paine... , May 30, 2018 at 01:10 PM
Housework, especially as embodied as capital in the young, which then yields for employers.
anne -> point... , May 30, 2018 at 03:32 PM
Housework, especially as embodied as capital in the young, which then yields for employers.

[ Do explain further, this seems interesting but is not entirely clear to me. ]

Gibbon1 -> anne... , May 30, 2018 at 07:03 PM
Neoliberal Economics being the creation of middle aged upper middle class men during the 1940's through the 1990's places value of zero on 'women's work'

Despite that much of it involves supporting current workers, birthing and raising next gen workers.

The Socialist/Communist Critique is families require some amount of resources in order to effectively perform that work. As such if you're going to have paid work then the state should require that the level of pay is adequate.

The neoliberal response is to get the vapors and engage in gate keeping behavior.

point -> anne... , May 31, 2018 at 04:36 AM
Yes, this is huge.

As a child grows up and receives all forms of social training and other preparation to participate in society ("get a job"), it is generally a quantity of "women's' work" that is "spent" to do this. But it's not "spent" so much as "invested", as the product of the work is a much improved human being. The young person embodies the investment. I guess we now call this "human capital". In any event, it's an investment of women's work that creates it.

Now, one would think that someone possessing such capital might face better prospects than one who does not, and that seems to be true. But it seems you can look at how competitive the asset is by looking at how it faires in the market. In recent decades, look at the gain in starting salaries. I have not seen a good series, but it seems they have lagged inflation, let alone GDP per capita. Thus the real yield on the asset has been negative, or one could say the yield has been on average entirely captured by employers. Others might make statements using "exploitation".

The job market for young people has been a cruel game of musical chairs: make a lifetime of investment just to join a circle for which there are too few chairs, and the employer gets all the yield.

anne , May 30, 2018 at 11:55 AM
http://www.columbia.edu/dlc/wp/econ/vickrey.html

October 15, 1996

Fifteen Fatal Fallacies of Financial Fundamentalism
A Disquisition on Demand Side Economics
By William Vickrey

Much of the conventional economic wisdom prevailing in financial circles, largely subscribed to as a basis for governmental policy, and widely accepted by the media and the public, is based on incomplete analysis, contrafactual assumptions, and false analogy. For instance, encouragement to saving is advocated without attention to the fact that for most people encouraging saving is equivalent to discouraging consumption and reducing market demand, and a purchase by a consumer or a government is also income to vendors and suppliers, and government debt is also an asset. Equally fallacious are implications that what is possible or desirable for individuals one at a time will be equally possible or desirable for all who might wish to do so or for the economy as a whole.

And often analysis seems to be based on the assumption that future economic output is almost entirely determined by inexorable economic forces independently of government policy so that devoting more resources to one use inevitably detracts from availability for another. This might be justifiable in an economy at chock-full employment, or it might be validated in a sense by postulating that the Federal Reserve Board will pursue and succeed in a policy of holding unemployment strictly to a fixed "non-inflation-accelerating" or "natural" rate. But under current conditions such success is neither likely nor desirable.

Some of the fallacies that result from such modes of thought are as follows.

Fallacy 1

Deficits are considered to represent sinful profligate spending at the expense of future generations who will be left with a smaller endowment of invested capital. This fallacy seems to stem from a false analogy to borrowing by individuals.

Fallacy 2

Urging or providing incentives for individuals to try to save more is said to stimulate investment and economic growth. This seems to derive from an assumption of an unchanged aggregate output so that what is not used for consumption will necessarily and automatically be devoted to capital formation.

Fallacy 3

Government borrowing is supposed to "crowd out" private investment.

Fallacy 4

Inflation is called the "cruelest tax." The perception seems to be that if only prices would stop rising, one's income would go further, disregarding the consequences for income.

Fallacy 5

"A chronic trend towards inflation is a reflection of living beyond our means." Alfred Kahn, quoted in Cornell '93, summer issue.

Fallacy 6

It is thought necessary to keep unemployment at a "non-inflation-accelerating" level ("NIARU") in the range of 4% to 6% if inflation is to be kept from increasing unacceptably.

Fallacy 7

Many profess a faith that if only governments would stop meddling, and balance their budgets, free capital markets would in their own good time bring about prosperity, possibly with the aid of "sound" monetary policy. It is assumed that there is a market mechanism by which interest rates adjust promptly and automatically to equate planned saving and investment in a manner analogous to the market by which the price of potatoes balances supply and demand. In reality no such market mechanism exists; if a prosperous equilibrium is to be achieved it will require deliberate intervention on the part of monetary authorities.

Fallacy 8

If deficits continue, the debt service would eventually swamp the fisc.

Fallacy 9

The negative effect of considering the overhanging burden of the increased debt would, it is claimed, cancel the stimulative effect of the deficit. This sweeping claim depends on a failure to analyze the situation in detail.

Fallacy 10

The value of the national currency in terms of foreign exchange (or gold) is held to be a measure of economic health, and steps to maintain that value are thought to contribute to this health. In some quarters a kind of jingoistic pride is taken in the value of one's currency, or satisfaction may be derived from the greater purchasing power of the domestic currency in terms of foreign travel.

Fallacy 11

It is claimed that exemption of capital gains from income tax will promote investment and growth.

Fallacy 12

Debt would, it is held, eventually reach levels that cause lenders to balk with taxpayers threatening rebellion and default.

Fallacy 13

Authorizing income-generating budget deficits results in larger and possibly more extravagant, wasteful and oppressive government expenditures.

Fallacy 14

Government debt is thought of as a burden handed on from one generation to its children and grandchildren.

Fallacy 15

Unemployment is not due to lack of effective demand, reducible by demand-increasing deficits, but is either "structural," resulting from a mismatch between the skills of the unemployed and the requirements of jobs, or "regulatory", resulting from minimum wage laws, restrictions on the employment of classes of individuals in certain occupations, requirements for medical coverage, or burdensome dismissal constraints, or is "voluntary," in part the result of excessively generous and poorly designed social insurance and relief provisions.

anne -> anne... , May 30, 2018 at 11:56 AM
This post can be used to abstract Vickrey...
mulp said in reply to anne... , May 31, 2018 at 01:07 PM
"Fallacy 14

Government debt is thought of as a burden handed on from one generation to its children and grandchildren."

So, Trump, and the GOP starting with Reagan, but especially in the 21st century, have created great fantastic wealth to lift away all burden from future generations!

Huge lifting of burden!

The future is life of ease in a huge hammock of debt!

ken melvin , May 30, 2018 at 06:50 PM
Branko was panelist on the Debate, France 24 last night

http://www.france24.com/en/20180530-debate-italy-populism-elections-sergio-mattarella

anne -> ken melvin... , May 30, 2018 at 07:08 PM
Nicely done.
Christopher H. , May 30, 2018 at 07:35 PM
I think Trump's victory broke the brains of the toxic trio (PGL, EMichael, kurt). They say it's pure racism. America is racist. We knew that, but Obama won twice. Oh it was a "backlash." Nah, Ben Rhodes knows.

https://www.nytimes.com/2018/05/30/us/politics/obama-reaction-trump-election-benjamin-rhodes.html

How Trump's Election Shook Obama: 'What if We Were Wrong?'

By Peter Baker
May 30, 2018

WASHINGTON -- Riding in a motorcade in Lima, Peru, shortly after the 2016 election, President Barack Obama was struggling to understand Donald J. Trump's victory.

"What if we were wrong?" he asked aides riding with him in the armored presidential limousine.

He had read a column asserting that liberals had forgotten how important identity was to people and had promoted an empty cosmopolitan globalism that made many feel left behind. "Maybe we pushed too far," Mr. Obama said. "Maybe people just want to fall back into their tribe."

His aides reassured him that he still would have won had he been able to run for another term and that the next generation had more in common with him than with Mr. Trump. Mr. Obama, the first black man elected president, did not seem convinced. "Sometimes I wonder whether I was 10 or 20 years too early," he said.

In the weeks after Mr. Trump's election, Mr. Obama went through multiple emotional stages, according to a new book by his longtime adviser Benjamin J. Rhodes. At times, the departing president took the long view, at other points, he flashed anger. He called Mr. Trump a "cartoon" figure who cared more about his crowd sizes than any particular policy. And he expressed rare self-doubt, wondering whether he had misjudged his own influence on American history.

[Obama's painfully slow recovery influenced history. Read Benjamin Friedman and Chris Dillow]

...

Mr. Obama and his team were confident that Mrs. Clinton would win and, like much of the country, were shocked when she did not. "I couldn't shake the feeling that I should have seen it coming," Mr. Rhodes writes. "Because when you distilled it, stripped out the racism and misogyny, we'd run against Hillary eight years ago with the same message Trump had used: She's part of a corrupt establishment that can't be trusted to bring change."

...

kurt -> Christopher H.... , May 31, 2018 at 09:07 AM
Funny you call me toxic when you just posted a smear and a lie. I have NEVER said it was all racism or only racism and you know it. What I have said is that 1. economic insecurity does not appear - due to study as opposed to your feelings - to have been a primary factor in the decision of Trump voters, and 2. that the studies show that the primary motivators were racism, fear of cultural change, sexism, and fear of immigrants. Economic insecurity fell several orders of magnitude below the primary motivators. In fact, you missed the "fall back into tribalism" part of your own post. Then again, you have never displayed even the slightest modicum of reading comprehension ability.
RC AKA Darryl, Ron said in reply to kurt... , May 31, 2018 at 09:47 AM
[What a difference a year makes at times. At other times not so much.]

https://www.attomdata.com/news/foreclosure-trends/2017-year-end-u-s-foreclosure-market-report/

U.S. Foreclosure Activity Drops to 12-Year Low in 2017

But New York Foreclosure Auctions, New Jersey REOs Both at 11-Year High;
Biggest Backlogs of Legacy Foreclosures in New York, New Jersey, Florida

IRVINE, Calif. – Jan. 18, 2018 – ATTOM Data Solutions, curator of the nation's largest multi-sourced property database, today released its Year-End 2017 U.S. Foreclosure Market Report, which shows foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 676,535 U.S. properties in 2017, down 27 percent from 2016 and down 76 percent from a peak of nearly 2.9 million in 2010 to the lowest level since 2005...

*

[When people that voted for Trump answer the question "Why" would it be too much to expect that their answer might change over time with their perception of both the economy and Donald Trump? There has always been a shortage of real world ceteris paribus in economics going back before Adam Smith.]

Christopher H. said in reply to kurt... , May 31, 2018 at 09:57 AM
You're being obtuse again. The effect of the center left liberal (see the Toxic Troika) campaign to mock economic anxiety's explanatory power is to deny it had anything to with Trump winning. They (you) deny he was populist when his rhetoric was very anti-elite and he's a new kind of Republican whose dog whistles are out in the open. THAT's why Obama was alarmed you obtuse moron!!!!

Benjamin Friedman and Chris Dillow are not hard to understand. A stagnating economy causes people to retreat to tribalism and become susceptible to demagogues. Of course a lot of people were already racist, but if the recovery had been good, had the last 40 years been prosperous for your average voter Hillary would have won instead of Trump.

Yet just yesterday the Toxic Troika's hero Krugman tweeted this straw man:

https://twitter.com/paulkrugman/status/1001566129456910340

Paul Krugman
Verified account
@paulkrugman

Hey, Roseanne Barr is only worth $80 million, and was being paid only 250K per episode. So her tweets were clearly driven by economic anxiety

1:49 PM - 29 May 2018

----------------------------------------

Does Krugman understand how dislike he is by the Left? I think he does. This kind of thing is him lashing back at the Left.

-----------------------------

As Krugman blogged about Bernie Sanders's policies during the primary, he said they didn't combat populism in Europe which is clearly wrong.

You can keep going about your stupid meaningless studies/paid propaganda but Krugman went on to contradict himself by saying populism in Italy WAS CAUSED by economic anxiety!!!

If the European Central Bank hadn't forced slow growth on Italy maybe the new government wouldn't be made up of populist parties who blame immigrants and the EU.

Not hard to understand but no doubt the Italian center left party Democrats (who nobody voted for) sad it was all about anti-immigrant racism nothing more.

The studies show it!!!

kurt -> Christopher H.... , May 31, 2018 at 10:31 AM
Wow you are thick. You are completely unable to understand the nuance of reality. You continue to claim things that are not true - about what I posted and about what Krugman posted. You cannot understand that what motivated Americans was different - substantively - than what motivated Italians. You claim that Krugman was wrong, yet provide zero evidence. Krugman provided evidence. Where is yours. Why do you deny study. Why do you deny rigor? I think I know - it is because your entire world view comes crashing down in the face of evidence. The world is not binary no matter how much you want it to be. It is complicated and messy.
Christopher H. , May 31, 2018 at 10:18 AM
I think the Toxic Troika would agree on the bad effects of Fox news and conservative UK tabloid media. This helps translate economic stagnation into conservative majorities.

[I always thought Thoma did the website as a way to combat this with free discussion among experts and hobbyists. Banning people as the Troika wants isn't going to help.]

https://mainlymacro
blogspot.com/2017/12/if-we-treat-plutocracy-as-democracy.html

Saturday, 2 December 2017
If we treat plutocracy as democracy, democracy dies
by Simon Wren-Lewis

The snake-oil salesmen

There are many similarities between Brexit and Trump. They are both authoritarian movements, where authority either lies with a single individual or a single vote: the vote that bindsthem all. This authority expresses the movement's identity. They are irrational movements, by which I mean that they cast aside expertise where that conflicts with the movements wishes. As a result, you will find their base of supporters among the less well educated, and that universities are seen as an enemy. Both groups are intensely nationalistic: both want to make America or England great again.

It is easy to relate each group to familiar concepts: class, race or whatever. But I think this classification misses something important. It misses what sustains these groups in their beliefs, allows them to maintain their world view which is so often contradicted by reality. Both groups get their information about the world from a section of the media that has turned news into propaganda. In the US this is Fox, and in the UK the right wing tabloids and the Telegraph.

A profound mistake is to see this media as a symptom rather than a cause. As the study I spoke about here clearly demonstrates, the output of Fox news is not designed to maximise its readership, but to maximise the impact of its propaganda on its readership. I think you could say exactly the same about the Sun and the Mail in the UK. Fox and the Sun are owned by the same man.

Even those who manage to cast off the idea that this unregulated media just reflects the attitude of its readers, generally think of this media as supportive of political parties. There is the Conservative and Labour supporting press in the UK, and similarly for the US. In my view that idea is ten or twenty years out of date, and even then it underestimates the independence of the media organisations. (The Sun famously supported Blair in 1997). More and more it is the media that calls the shots, and the political parties follow.

Brexit would not have happened if it had remained the wish of a minority of Conservative MPs. It happened because of the right wing UK press. Brexit happened because this right wing press recognised a large section of their readership were disaffected from conventional politics, and began grooming them with stories of EU immigrants taking jobs, lowering wages and taking benefits (and sometimes much worse). These stories were not (always) false, but like all good propaganda they elevated a half-truth into a firm belief. Of course this grooming played on age old insecurities, but it magnified them into a political movement. Nationalism does the same. It did not just reflect readers existing views, but rather played on their doubts and fears and hopes and turned this into votes.

This is not to discount some of the very real grievances that led to the Brexit vote, or the racism that led to the election of Trump. This analysis of today's populism is important, as long as it does not get sidetracked into debates over identity versus economics. Stressing economic causes of populism does not devalue identity issues (like race or immigration), but it is the economics that causes the swings that help put populists in power. It was crucial, for example, to the trick that the media played to convince many to vote for Brexit: that EU immigrants and payments were reducing access to public services, whereas in reality the opposite is true.

Yet while economic issues may have created a winning majority for both Brexit and Trump, the identity issues sustained by the media make support for both hard to diminish. Brexit and Trump are expressions of identity, and often of what has been lost, which are very difficult to break down when sustained by the group's media. In addition both Trump and Brexit maintain, because their proponents want it to be maintained, the idea that it represents the normally ignored, striking back against the government machine in the capital city with all its experts.

But to focus on what some call the 'demand' for populism is in danger of missing at least half the story. Whatever legitimate grievances Brexit and Trump supporters may have had, they were used and will be betrayed. There is nothing in leaving the EU that will help the forgotten towns of England and Wales. Although he may try, Trump will not bring many manufacturing jobs back to the rust belt, and his antics with NAFTA may make things worse. Identifying the left behind is only half the story, because it does not tell you why they fell for the remedies of snake-oil salesmen.

As I wrote immediately after the vote in my most widely read post, Brexit was first and foremost a triumph for the UK right wing press. That press first fostered a party, UKIP, that embodied the views the press pushed. The threat of that party and defections to it then forced the Prime Minister to offer the referendum the press wanted. It was a right wing press that sold a huge lie about the UK economy, a lie the broadcast media bought, to ensure the Conservatives won the next election. When the referendum came, it was this right wing press that ensured enough votes were won and thereby overturned the government.

Equally Donald Trump was first and foremost the candidate of Fox News. As Bruce Bartlett has so eloquently written, Fox may have started off as a network that just supported Republicans, but its power steadily grew. Being partisan at Fox became misinforming its viewers, such that Fox viewers are clearly less well informed than viewers of other news providers. One analysis suggested over half of the facts stated on Fox are untrue: UK readers may well remember them reporting that Birmingham was a no-go area for non-Muslims.

Fox became a machine for keeping the base angry and fired up, believing that nothing could be worse than voting for a Democrat. It was Fox News that stopped Republican voters seeing that they were voting for a demagogue, concealed that he lied openly all the time, that incites hatred against other religions and ethnic groups, and makes its viewers believe that Clinton deserves to be locked up. It is not reflecting the views of its viewers, but moulding them. As economists have shown, the output of Fox does not optimise their readership, but optimises the propaganda power of its output. Despite occasional tiffs, Trump was the candidate of Fox in the primaries.

We have a right wing media organisation that has overthrown the Republican political establishment, and a right wing press that has overthrown a right wing government. How some political scientists can continue to analyse this as if the media were simply passive, supportive or even invisible when it brings down governments or subverts political parties I do not know.

The plutocracy

Trump and Brexit are the creations of a kind of plutocracy. Politics in the US has had strong plutocratic elements for some time, because of the way that money can sway elections. That gave finance a powerful influence in the Democratic party, and made the Republicans obsessive about cutting higher tax rates. In the UK plutocracy has been almost non-existent by comparison, and operated mainly through party funding and seats in the House of Lords, although we are still finding out where the money behind the Brexit campaign came from.

By focusing on what some call the demand side of populism rather than the supply side, we fail to see both Trump and Brexit as primarily expressions of plutocratic power. Trump's administration is plutocracy personified, and as Paul Pierson argues, its substantive agenda constitutes a full-throated endorsement of the GOP economic elite's long-standing agenda. The Brexiteers want to turn the UK into Singapore, a kind of neoliberalism that stresses markets should be free from government interference, rather than free to work for everyone, and that trade should be free from regulations, rather than regulations being harmonised so that business is free to trade.

It is also a mistake to see this plutocracy as designed to support capital. This should again be obvious from Brexit and Trump. It is in capital's interest to have borders open to goods and people rather than creating barriers and erecting walls. What a plutocracy will do is ensure that high inequality, in terms of the 1% or 0.1% etc, is maintained or even increased. Indeed many plutocrats amassed their wealth by extracting large sums from the firms for which they worked, wealth that might otherwise have gone to investors in the form of dividends. In this sense they are parasitic to capital. And this plutocracy will also ensure that social mobility is kept low so the membership of the plutocracy is sustained: social mobility goes with equality, as Pickett and Wilkinson show.

It is also a mistake to see what is happening as somehow the result of some kind of invisible committee of the 1% (or 0.1% and so on). The interests of the Koch brothers are not necessarily the interests of Trump (it is no accident the former want to help buy Time magazine). The interests of Arron Banks are not those of Lloyd Blankfein. Instead we are finding individual media moguls forming partnerships with particular politicians to press not only their business interests, but their individual political views as well. And in this partnership it is often clear who is dependent on whom. After all, media competition is slim while there are plenty of politicians.

What has this got to do with neoliberalism? which is supposed to be the dominant culture of the political right. As I argued here, it is a mistake to see neoliberalism as some kind of unified ideology. It may have a common core in terms of the primacy of the market, but how that is interpreted is not uniform. Are neoliberals in favour of free trade, or against? It appears that they can be both. Instead neoliberalism is a set of ideas based around a common belief in the market that different groups have used and interpreted to their advantage, while at the same time also being influenced by the ideology. Both interests and ideas matter. While some neoliberals see competition as the most valuable feature of capitalism, others will seek to stifle competition to preserve monopoly power. Brexiters and their press backers are neoliberals, just as the Cameron government they brought down were neoliberals.

I think there is some truth in the argument, made by Philip Mirowski among others, that a belief in neoliberalism can easily involve an anti-enlightenment belief that people need to be persuaded to subject themselves fully to the market. Certainly those on the neoliberal right are more easily persuaded to invest time and effort in the dark arts of spin than those on the left. But it would be going too far to suggest that all neoliberals are anti-democratic: as I have said, neoliberalism is diverse and divided. What I argued in my neoliberal overreach post was that neoliberalism as formulated in the UK and US had made it possible for the plutocracy we now see to become dominant.

....

kurt -> Christopher H.... , May 31, 2018 at 10:33 AM
Nobody wants you banned because you provide alternative opinions. I actually enjoy having a well considered argument with people who have differing opinions. We want you banned because you lie - constantly - about other peoples positions and you constantly gaslight. You are an expert propagandist, but not an expert in much else. In fact, you get most things wrong. Also - you are obnoxiously rude all the time. And you are always on the side of the Alex Jones/Rush Limbaugh types.
mulp said in reply to kurt... , May 31, 2018 at 12:28 PM
It's not so much that he lies but that he never defends his arguments when countered with facts and logic, basically doubling down like Trump in attacks on liberals arguing with facts and logic.

But most important, he never explains why an African economy or Cuba economy or Chavez-Maduro economy would be so much better. If they have such great economies, why hasn't he moved there?

Hey Cuba is close by. And the fact trade is been cut off by the US embargo should be a big plus given global trade is horrible for workers. The US government trade embargoes on Cuba are providing great benefits to Cuban workers who never lose their job from evil imports from the US.

And workers in Cuba benefit from lack of competition.

[May 31, 2018] Meet the Economist Behind the One Percent's Stealth Takeover of America by Lynn Parramore

Highly recommended!
This looks like Ann Rand philosophy: "The people who needed protection were property owners, and their rights could only be secured though constitutional limits to prevent the majority of voters from encroaching on them, an idea Buchanan lays out in works like Property as a Guarantor of Liberty (1993). MacLean observes that Buchanan saw society as a cutthroat realm of makers (entrepreneurs) constantly under siege by takers (everybody else) His own language was often more stark, warning the alleged "prey" of "parasites" and "predators" out to fleece them."
Notable quotes:
"... By Lynn Parramore, Senior Research Analyst, Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website ..."
"... The Limits of Liberty ..."
"... Property as a Guarantor of Liberty ..."
"... Brown v. Board of Education ..."
"... Calhoun, called the "Marx of the Master Class" by historian Richard Hofstadter, saw himself and his fellow southern oligarchs as victims of the majority. Therefore, as MacLean explains, he sought to create "constitutional gadgets" to constrict the operations of government ..."
"... She argues out that unlike even the most property-friendly founders Alexander Hamilton and James Madison, Buchanan wanted a private governing elite of corporate power that was wholly released from public accountability. ..."
"... Suppressing voting, changing legislative processes so that a normal majority could no longer prevail, sowing public distrust of government institutions -- all these were tactics toward the goal. But the Holy Grail was the Constitution: alter it and you could increase and secure the power of the wealthy in a way that no politician could ever challenge. ..."
"... MacLean observes that the Virginia school, as Buchanan's brand of economic and political thinking is known, is a kind of cousin to the better-known, market-oriented Chicago and Austrian schools -- proponents of all three were members of the Mont Pelerin Society, an international neoliberal organization which included Milton Friedman and Friedrich Hayek. But the Virginia school's focus and career missions were distinct. In an interview with the Institute for New Economic Thinking (INET), MacLean described Friedman and Buchanan as yin and yang: "Friedman was this genial, personable character who loved to be in the limelight and made a sunny case for the free market and the freedom to choose and so forth. Buchanan was the dark side of this: he thought, ok, fine, they can make a case for the free market, but everybody knows that free markets have externalities and other problems. So he wanted to keep people from believing that government could be the alternative to those problems." ..."
"... Buchanan's school focused on public choice theory, later adding constitutional economics and the new field of law and economics to its core research and advocacy. The economist saw that his vision would never come to fruition by focusing on who rules. It was much better to focus on the rules themselves , and that required a "constitutional revolution." ..."
"... MacLean describes how the economist developed a grand project to train operatives to staff institutions funded by like-minded tycoons, most significantly Charles Koch, who became interested in his work in the '70s and sought the economist's input in promoting "Austrian economics" in the U.S. and in advising the Cato Institute, a libertarian think tank. ..."
"... With Koch's money and enthusiasm, Buchanan's academic school evolved into something much bigger. By the 1990s, Koch realized that Buchanan's ideas -- transmitted through stealth and deliberate deception, as MacLean amply documents -- could help take government down through incremental assaults that the media would hardly notice. The tycoon knew that the project was extremely radical, even a "revolution" in governance, but he talked like a conservative to make his plans sound more palatable. ..."
"... At the 1997 fiftieth anniversary of the Mont Pelerin Society, MacLean recounts that Buchanan and his associate Henry Manne, a founding theorist of libertarian economic approaches to law, focused on such affronts to capitalists as environmentalism and public health and welfare, expressing eagerness to dismantle Social Security, Medicaid, and Medicare as well as kill public education because it tended to foster community values. Feminism had to go, too: the scholars considered it a socialist project. ..."
"... To put the success into perspective, MacLean points to the fact that Henry Manne, whom Buchanan was instrumental in hiring, created legal programs for law professors and federal judges which could boast that by 1990 two of every five sitting federal judges had participated. "40 percent of the U.S. federal judiciary," writes MacLean, "had been treated to a Koch-backed curriculum." ..."
"... Buchanan's role in the disastrous Pinochet government of Chile has been underestimated partly because unlike Milton Friedman, who advertised his activities, Buchanan had the shrewdness to keep his involvement quiet. With his guidance, the military junta deployed public choice economics in the creation of a new constitution, which required balanced budgets and thereby prevented the government from spending to meet public needs. Supermajorities would be required for any changes of substance, leaving the public little recourse to challenge programs like the privatization of social security. ..."
"... The Limits of Liberty ..."
"... MacLean is not the only scholar to sound the alarm that the country is experiencing a hostile takeover that is well on its way to radically, and perhaps permanently, altering the society. Peter Temin, former head of the MIT economics department, INET grantee, and author of The Vanishing Middle Class ..."
"... The One Percent Solution ..."
"... She observes, for example, that many liberals have missed the point of strategies like privatization. Efforts to "reform" public education and Social Security are not just about a preference for the private sector over the public sector, she argues. You can wrap your head around, even if you don't agree. Instead, MacLean contents, the goal of these strategies is to radically alter power relations, weakening pro-public forces and enhancing the lobbying power and commitment of the corporations that take over public services and resources, thus advancing the plans to dismantle democracy and make way for a return to oligarchy. The majority will be held captive so that the wealthy can finally be free to do as they please, no matter how destructive. ..."
"... MacLean argues that despite the rhetoric of Virginia school acolytes, shrinking big government is not really the point. The oligarchs require a government with tremendous new powers so that they can bypass the will of the people. This, as MacLean points out, requires greatly expanding police powers "to control the resultant popular anger." The spreading use of pre-emption by GOP-controlled state legislatures to suppress local progressive victories such as living wage ordinances is another example of the right's aggressive use of state power. ..."
"... They could, and have ..."
"... Getting it done ..."
"... Why I, Too, Am Not a Conservative ..."
May 31, 2018 | www.nakedcapitalism.com
May 31, 2018 By Lynn Parramore, Senior Research Analyst, Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website

Nobel laureate James Buchanan is the intellectual lynchpin of the Koch-funded attack on democratic institutions, argues Duke historian Nancy MacLean

Ask people to name the key minds that have shaped America's burst of radical right-wing attacks on working conditions, consumer rights and public services, and they will typically mention figures like free market-champion Milton Friedman, libertarian guru Ayn Rand, and laissez-faire economists Friedrich Hayek and Ludwig von Mises.

James McGill Buchanan is a name you will rarely hear unless you've taken several classes in economics. And if the Tennessee-born Nobel laureate were alive today, it would suit him just fine that most well-informed journalists, liberal politicians, and even many economics students have little understanding of his work.

The reason? Duke historian Nancy MacLean contends that his philosophy is so stark that even young libertarian acolytes are only introduced to it after they have accepted the relatively sunny perspective of Ayn Rand. (Yes, you read that correctly). If Americans really knew what Buchanan thought and promoted, and how destructively his vision is manifesting under their noses, it would dawn on them how close the country is to a transformation most would not even want to imagine, much less accept.

That is a dangerous blind spot, MacLean argues in a meticulously researched book, Democracy in Chains , a finalist for the National Book Award in Nonfiction. While Americans grapple with Donald Trump's chaotic presidency, we may be missing the key to changes that are taking place far beyond the level of mere politics. Once these changes are locked into place, there may be no going back.

An Unlocked Door in Virginia

MacLean's book reads like an intellectual detective story. In 2010, she moved to North Carolina, where a Tea Party-dominated Republican Party got control of both houses of the state legislature and began pushing through a radical program to suppress voter rights, decimate public services, and slash taxes on the wealthy that shocked a state long a beacon of southern moderation. Up to this point, the figure of James Buchanan flickered in her peripheral vision, but as she began to study his work closely, the events in North Carolina and also Wisconsin, where Governor Scott Walker was leading assaults on collective bargaining rights, shifted her focus.

Could it be that this relatively obscure economist's distinctive thought was being put forcefully into action in real time?

MacLean could not gain access to Buchanan's papers to test her hypothesis until after his death in January 2013. That year, just as the government was being shut down by Ted Cruz & Co., she traveled to George Mason University in Virginia, where the economist's papers lay willy-nilly across the offices of a building now abandoned by the Koch-funded faculty to a new, fancier center in Arlington.

MacLean was stunned. The archive of the man who had sought to stay under the radar had been left totally unsorted and unguarded. The historian plunged in, and she read through boxes and drawers full of papers that included personal correspondence between Buchanan and billionaire industrialist Charles Koch. That's when she had an amazing realization: here was the intellectual lynchpin of a stealth revolution currently in progress.

A Theory of Property Supremacy

Buchanan, a 1940 graduate of Middle Tennessee State University who later attended the University of Chicago for graduate study, started out as a conventional public finance economist. But he grew frustrated by the way in which economic theorists ignored the political process.

Buchanan began working on a description of power that started out as a critique of how institutions functioned in the relatively liberal 1950s and '60s, a time when economist John Maynard Keynes's ideas about the need for government intervention in markets to protect people from flaws so clearly demonstrated in the Great Depression held sway. Buchanan, MacLean notes, was incensed at what he saw as a move toward socialism and deeply suspicious of any form of state action that channels resources to the public. Why should the increasingly powerful federal government be able to force the wealthy to pay for goods and programs that served ordinary citizens and the poor?

In thinking about how people make political decisions and choices, Buchanan concluded that you could only understand them as individuals seeking personal advantage. In interview cited by MacLean, the economist observed that in the 1950s Americans commonly assumed that elected officials wanted to act in the public interest. Buchanan vehemently disagreed -- that was a belief he wanted, as he put it, to "tear down." His ideas developed into a theory that came to be known as "public choice."

Buchanan's view of human nature was distinctly dismal. Adam Smith saw human beings as self-interested and hungry for personal power and material comfort, but he also acknowledged social instincts like compassion and fairness. Buchanan, in contrast, insisted that people were primarily driven by venal self-interest. Crediting people with altruism or a desire to serve others was "romantic" fantasy: politicians and government workers were out for themselves, and so, for that matter, were teachers, doctors, and civil rights activists. They wanted to control others and wrest away their resources: "Each person seeks mastery over a world of slaves," he wrote in his 1975 book, The Limits of Liberty .

Does that sound like your kindergarten teacher? It did to Buchanan.

The people who needed protection were property owners, and their rights could only be secured though constitutional limits to prevent the majority of voters from encroaching on them, an idea Buchanan lays out in works like Property as a Guarantor of Liberty (1993). MacLean observes that Buchanan saw society as a cutthroat realm of makers (entrepreneurs) constantly under siege by takers (everybody else) His own language was often more stark, warning the alleged "prey" of "parasites" and "predators" out to fleece them.

In 1965 the economist launched a center dedicated to his theories at the University of Virginia, which later relocated to George Mason University. MacLean describes how he trained thinkers to push back against the Brown v. Board of Education decision to desegregate America's public schools and to challenge the constitutional perspectives and federal policy that enabled it. She notes that he took care to use economic and political precepts, rather than overtly racial arguments, to make his case, which nonetheless gave cover to racists who knew that spelling out their prejudices would alienate the country.

All the while, a ghost hovered in the background -- that of John C. Calhoun of South Carolina, senator and seventh vice president of the United States.

Calhoun was an intellectual and political powerhouse in the South from the 1820s until his death in 1850, expending his formidable energy to defend slavery. Calhoun, called the "Marx of the Master Class" by historian Richard Hofstadter, saw himself and his fellow southern oligarchs as victims of the majority. Therefore, as MacLean explains, he sought to create "constitutional gadgets" to constrict the operations of government.

Economists Tyler Cowen and Alexander Tabarrok, both of George Mason University, have noted the two men's affinities, heralding Calhoun "a precursor of modern public choice theory" who "anticipates" Buchanan's thinking. MacLean observes that both focused on how democracy constrains property owners and aimed for ways to restrict the latitude of voters. She argues out that unlike even the most property-friendly founders Alexander Hamilton and James Madison, Buchanan wanted a private governing elite of corporate power that was wholly released from public accountability.

Suppressing voting, changing legislative processes so that a normal majority could no longer prevail, sowing public distrust of government institutions -- all these were tactics toward the goal. But the Holy Grail was the Constitution: alter it and you could increase and secure the power of the wealthy in a way that no politician could ever challenge.

Gravy Train to Oligarchy

MacLean explains that Virginia's white elite and the pro-corporate president of the University of Virginia, Colgate Darden, who had married into the DuPont family, found Buchanan's ideas to be spot on. In nurturing a new intelligentsia to commit to his values, Buchanan stated that he needed a "gravy train," and with backers like Charles Koch and conservative foundations like the Scaife Family Charitable Trusts, others hopped aboard. Money, Buchanan knew, can be a persuasive tool in academia. His circle of influence began to widen.

MacLean observes that the Virginia school, as Buchanan's brand of economic and political thinking is known, is a kind of cousin to the better-known, market-oriented Chicago and Austrian schools -- proponents of all three were members of the Mont Pelerin Society, an international neoliberal organization which included Milton Friedman and Friedrich Hayek. But the Virginia school's focus and career missions were distinct. In an interview with the Institute for New Economic Thinking (INET), MacLean described Friedman and Buchanan as yin and yang: "Friedman was this genial, personable character who loved to be in the limelight and made a sunny case for the free market and the freedom to choose and so forth. Buchanan was the dark side of this: he thought, ok, fine, they can make a case for the free market, but everybody knows that free markets have externalities and other problems. So he wanted to keep people from believing that government could be the alternative to those problems."

The Virginia school also differs from other economic schools in a marked reliance on abstract theory rather than mathematics or empirical evidence. That a Nobel Prize was awarded in 1986 to an economist who so determinedly bucked the academic trends of his day was nothing short of stunning, MacLean observes. But, then, it was the peak of the Reagan era, an administration several Buchanan students joined.

Buchanan's school focused on public choice theory, later adding constitutional economics and the new field of law and economics to its core research and advocacy. The economist saw that his vision would never come to fruition by focusing on who rules. It was much better to focus on the rules themselves , and that required a "constitutional revolution."

MacLean describes how the economist developed a grand project to train operatives to staff institutions funded by like-minded tycoons, most significantly Charles Koch, who became interested in his work in the '70s and sought the economist's input in promoting "Austrian economics" in the U.S. and in advising the Cato Institute, a libertarian think tank.

Koch, whose mission was to save capitalists like himself from democracy, found the ultimate theoretical tool in the work of the southern economist. The historian writes that Koch preferred Buchanan to Milton Friedman and his "Chicago boys" because, she says, quoting a libertarian insider, they wanted "to make government work more efficiently when the true libertarian should be tearing it out at the root."

With Koch's money and enthusiasm, Buchanan's academic school evolved into something much bigger. By the 1990s, Koch realized that Buchanan's ideas -- transmitted through stealth and deliberate deception, as MacLean amply documents -- could help take government down through incremental assaults that the media would hardly notice. The tycoon knew that the project was extremely radical, even a "revolution" in governance, but he talked like a conservative to make his plans sound more palatable.

MacLean details how partnered with Koch, Buchanan's outpost at George Mason University was able to connect libertarian economists with right-wing political actors and supporters of corporations like Shell Oil, Exxon, Ford, IBM, Chase Manhattan Bank, and General Motors. Together they could push economic ideas to public through media, promote new curricula for economics education, and court politicians in nearby Washington, D.C.

At the 1997 fiftieth anniversary of the Mont Pelerin Society, MacLean recounts that Buchanan and his associate Henry Manne, a founding theorist of libertarian economic approaches to law, focused on such affronts to capitalists as environmentalism and public health and welfare, expressing eagerness to dismantle Social Security, Medicaid, and Medicare as well as kill public education because it tended to foster community values. Feminism had to go, too: the scholars considered it a socialist project.

The Oligarchic Revolution Unfolds

Buchanan's ideas began to have huge impact, especially in America and in Britain. In his home country, the economist was deeply involved efforts to cut taxes on the wealthy in 1970s and 1980s and he advised proponents of Reagan Revolution in their quest to unleash markets and posit government as the "problem" rather than the "solution." The Koch-funded Virginia school coached scholars, lawyers, politicians, and business people to apply stark right-wing perspectives on everything from deficits to taxes to school privatization. In Britain, Buchanan's work helped to inspire the public sector reforms of Margaret Thatcher and her political progeny.

To put the success into perspective, MacLean points to the fact that Henry Manne, whom Buchanan was instrumental in hiring, created legal programs for law professors and federal judges which could boast that by 1990 two of every five sitting federal judges had participated. "40 percent of the U.S. federal judiciary," writes MacLean, "had been treated to a Koch-backed curriculum."

MacLean illustrates that in South America, Buchanan was able to first truly set his ideas in motion by helping a bare-knuckles dictatorship ensure the permanence of much of the radical transformation it inflicted on a country that had been a beacon of social progress. The historian emphasizes that Buchanan's role in the disastrous Pinochet government of Chile has been underestimated partly because unlike Milton Friedman, who advertised his activities, Buchanan had the shrewdness to keep his involvement quiet. With his guidance, the military junta deployed public choice economics in the creation of a new constitution, which required balanced budgets and thereby prevented the government from spending to meet public needs. Supermajorities would be required for any changes of substance, leaving the public little recourse to challenge programs like the privatization of social security.

The dictator's human rights abuses and pillage of the country's resources did not seem to bother Buchanan, MacLean argues, so long as the wealthy got their way. "Despotism may be the only organizational alternative to the political structure that we observe," the economist had written in The Limits of Liberty . If you have been wondering about the end result of the Virginia school philosophy, well, the economist helpfully spelled it out.

A World of Slaves

Most Americans haven't seen what's coming.

MacLean notes that when the Kochs' control of the GOP kicked into high gear after the financial crisis of 2007-08, many were so stunned by the "shock-and-awe" tactics of shutting down government, destroying labor unions, and rolling back services that meet citizens' basic necessities that few realized that many leading the charge had been trained in economics at Virginia institutions, especially George Mason University. Wasn't it just a new, particularly vicious wave of partisan politics?

It wasn't. MacLean convincingly illustrates that it was something far more disturbing.

MacLean is not the only scholar to sound the alarm that the country is experiencing a hostile takeover that is well on its way to radically, and perhaps permanently, altering the society. Peter Temin, former head of the MIT economics department, INET grantee, and author of The Vanishing Middle Class , as well as economist Gordon Lafer of the University of Oregon and author of The One Percent Solution , have provided eye-opening analyses of where America is headed and why. MacLean adds another dimension to this dystopian big picture, acquainting us with what has been overlooked in the capitalist right wing's playbook.

She observes, for example, that many liberals have missed the point of strategies like privatization. Efforts to "reform" public education and Social Security are not just about a preference for the private sector over the public sector, she argues. You can wrap your head around, even if you don't agree. Instead, MacLean contents, the goal of these strategies is to radically alter power relations, weakening pro-public forces and enhancing the lobbying power and commitment of the corporations that take over public services and resources, thus advancing the plans to dismantle democracy and make way for a return to oligarchy. The majority will be held captive so that the wealthy can finally be free to do as they please, no matter how destructive.

MacLean argues that despite the rhetoric of Virginia school acolytes, shrinking big government is not really the point. The oligarchs require a government with tremendous new powers so that they can bypass the will of the people. This, as MacLean points out, requires greatly expanding police powers "to control the resultant popular anger." The spreading use of pre-emption by GOP-controlled state legislatures to suppress local progressive victories such as living wage ordinances is another example of the right's aggressive use of state power.

Could these right-wing capitalists allow private companies to fill prisons with helpless citizens -- or, more profitable still, right-less undocumented immigrants? They could, and have . Might they engineer a retirement crisis by moving Americans to inadequate 401(k)s? Done . Take away the rights of consumers and workers to bring grievances to court by making them sign forced arbitration agreements? Check . Gut public education to the point where ordinary people have such bleak prospects that they have no energy to fight back? Getting it done .

Would they even refuse children clean water? Actually, yes.

MacLean notes that in Flint, Michigan, Americans got a taste of what the emerging oligarchy will look like -- it tastes like poisoned water. There, the Koch-funded Mackinac Center pushed for legislation that would allow the governor to take control of communities facing emergency and put unelected managers in charge. In Flint, one such manager switched the city's water supply to a polluted river, but the Mackinac Center's lobbyists ensured that the law was fortified by protections against lawsuits that poisoned inhabitants might bring. Tens of thousands of children were exposed to lead, a substance known to cause serious health problems including brain damage.

Tyler Cowen has provided an economic justification for this kind of brutality, stating that where it is difficult to get clean water, private companies should take over and make people pay for it. "This includes giving them the right to cut off people who don't -- or can't -- pay their bills," the economist explains.

To many this sounds grotesquely inhumane, but it is a way of thinking that has deep roots in America. In Why I, Too, Am Not a Conservative (2005), Buchanan considers the charge of heartlessness made against the kind of classic liberal that he took himself to be. MacLean interprets his discussion to mean that people who "failed to foresee and save money for their future needs" are to be treated, as Buchanan put it, "as subordinate members of the species, akin to animals who are dependent.'"

Do you have your education, health care, and retirement personally funded against all possible exigencies? Then that means you.

Buchanan was not a dystopian novelist. He was a Nobel Laureate whose sinister logic exerts vast influence over America's trajectory. It is no wonder that Cowen, on his popular blog Marginal Revolution, does not mention Buchanan on a list of underrated influential libertarian thinkers, though elsewhere on the blog, he expresses admiration for several of Buchanan's contributions and acknowledges that the southern economist "thought more consistently in terms of 'rules of the games' than perhaps any other economist."

The rules of the game are now clear.

Research like MacLean's provides hope that toxic ideas like Buchanan's may finally begin to face public scrutiny. Yet at this very moment, the Kochs' State Policy Network and the American Legislative Exchange Council (ALEC), a group that connects corporate agents to conservative lawmakers to produce legislation, are involved in projects that the Trump-obsessed media hardly notices, like pumping money into state judicial races. Their aim is to stack the legal deck against Americans in ways that MacLean argues may have even bigger effects than Citizens United, the 2010 Supreme Court ruling which unleashed unlimited corporate spending on American politics. The goal is to create a judiciary that will interpret the Constitution in favor of corporations and the wealthy in ways that Buchanan would have heartily approved.

"The United States is now at one of those historic forks in the road whose outcome will prove as fateful as those of the 1860s, the 1930s, and the 1960s," writes MacLean. "To value liberty for the wealthy minority above all else and enshrine it in the nation's governing rules, as Calhoun and Buchanan both called for and the Koch network is achieving, play by play, is to consent to an oligarchy in all but the outer husk of representative form."

Nobody can say we weren't warned.

[May 30, 2018] How Media Amnesia Has Trapped Us in a Neoliberal Groundhog Day

Highly recommended!
Notable quotes:
"... By Laura Basu, a Marie Curie Research Fellow at Cardiff School of Journalism, Media and Culture. Originally published at openDemocracy ..."
"... This ideology spread through the media from the 1980s ..."
"... Fast-forward to April 2009, barely 6 months after the announcement of a £500 billion bank bailout. A media hysteria was nowraging around Britain's deficit . While greedy bankers were still taking some of the blame, the systemic problems in finance and the problems with the free-market model had been forgotten. Instead, public profligacy had become the dominant explanation for the deficit. The timeline of the crisis was being erased and rewritten. ..."
"... These measures were a ramped-up version of the kinds of reforms that had produced the crisis in the first place. This fact, however, was forgotten. These 'pro-business' moves were enthusiastically embraced by the media, far more so than austerity. Of the 5 outlets analysed (The BBC, Telegraph, Sun, Guardian and Mirror), only the Guardian rejected them more frequently than endorsing them. ..."
"... "One of the saddest lessons of history is this: If we've been bamboozled long enough, we tend to reject any evidence of the bamboozle. We're no longer interested in finding out the truth. The bamboozle has captured us. It's simply too painful to acknowledge, even to ourselves, that we've been taken. Once you give a charlatan power over you, you almost never get it back." ..."
"... This post is disheartening in so many ways. Start with "media hysteria" -- adding yet another glib coinage to hide a lack of explanation behind a simple but innapt analogy like the endless "addictions" from which personifications of various abstract entities suffer. ..."
"... This coinage presupposes a media sufficiently free to be possessed by hysteria. Dancing puppets might with some art appear "hysterical". And the strange non-death of Neoliberalsm isn't so strange or poorly understood in 2018 though the detailed explanation hasn't reached as many as one might have hoped, including the authors of this brief post. Consider their unhappy mashup of thoughts in a key sentence of the first paragraph: "This power has been maintained with the help of a robust ideology centred on free markets (though in reality markets are captured by corporations and are maintained by the state) and the superiority of the private sector over the public sector." The tail of this sentence obviates the rest of the post. And we ought not ignore the detail that Neoliberalism believes in the Market as a solution to all problems -- NOT the 'free market' of neoclassical economics or libertarian ideology. ..."
"... From "media hysteria" the post postulates "amnesia" of a public convinced of "greedy bankers" who need regulation. In the U.S. the propaganda was more subtle -- at least in my opinion. We were fed the "bad apples" theory mocked in a brief series of media clips presented in the documentary film "Inside Job". Those clips suggest a better explanation for the swift media transitions from banking reform to balanced budgets and austerity with more tax cuts for the wealthy than "amnesia" or "hyper-amnesia". The media Corporations are tightly controlled by the same forces that captured Corporations and -- taking the phrase "the superiority of the private sector over the public sector" in the sense that a superior directs an inferior [rather than the intended(?) sense] -- direct and essentially own our governments. ..."
"... The remarkable thing about public discourse and political and economic news reporting is how superficial it has become, so devoid of a foundation of any kind in history or theory. You can not have an effective critique of society or the economy or anything, if you do not see a system with a history and think it matters. Neoliberalism has become what people say when they think none of it really matters; it is all just noise. ..."
"... "Neoliberalism has become what people say when they think none of it really matters; it is all just noise." ..."
"... I also think that the crisis of neoliberalism echos a problem caused by capitalism, itself. I think David Harvey stated that "capitalism doesn't solve problems, it often just moves them around". ..."
"... Matt Stoller tweet from August 2017, as germane now as ever: "The political crisis we are facing is simple. American commerce, law, finance, and politics is organized around cheating people." ..."
"... George Orwell noted that the middle class Left couldn't handle dealing with real working class people, although there isn't the same huge gulf these days, I believe there is still a vestige of it due to the British class system. The Fabians set up shop in the East End around the turn of the last century & directly rubbed shoulders with the likes of Coster Mongers – a combination that led to a strike that was one of the first success stories in the attempt to get a few more crumbs than what was usually allowed to fall from the top table. ..."
"... If Neoliberalism is now being noticed I imagine that it is because of it's success in working it's way up the food chain. After all these same Middle classes for the most part did not care much for the plight of the poor during those Victorian values. Many could not wait to employ maids of all work who slaved for up to fourteen hours a day with only Sunday afternoon's off. The Suffragettes had a real problem with this as their relatively comfortable lives would soon descend into drudgery without their servants. ..."
"... Coincidentally, the NYT article on Austerity Britain is the closest I have read to an accurate picture that I have seen for a good while. ..."
"... It's also not a new thing. British media worship of neoliberalism has been growing since the 1980s, at the same time as newspapers have been closing and media sources of all kinds laying off their staff. 2008 was a temporary blip, and since the average journalist has the attention span of a hamster, it was back to usual a few months later. Once the crash stopped being "news" old patterns reasserted themselves. I wonder, incidentally, how many economics journalists in the UK actually remember the time before neoliberalism? ..."
"... Consuming corporate media is increasingly a bizarro-world experience. Even something like the Trump scandal/constitutional crisis/investigation seems like the arrogant internecine warfare of corrupt factions of the establishment. Meanwhile, Americans are increasingly living out of their cars. ..."
"... 1. Oligarchs having captured thoroughly the media, the legislatures and the judiciary, (as well as large parts of what might be construed as "liberal" political organisations e.g. the Democratic Party of the USA) ..."
May 30, 2018 | www.nakedcapitalism.com

Posted on May 29, 2018 by Yves Smith Yves here. I'm sure readers could write a US version of this timeline despite the fact that we had a second crisis and bailout, that of way more foreclosures than were warranted, thanks to lousy incentives to mortgage servicers and lack of political will to intervene, and foreclosure fraud to cover up for chain of title failures.

By Laura Basu, a Marie Curie Research Fellow at Cardiff School of Journalism, Media and Culture. Originally published at openDemocracy

It hasn't escaped many people's attention that, a decade after the biggest economic crash of a generation, the economic model producing that meltdown has not exactly been laid to rest. The crisis in the NHS and the Carillion and Capital scandals are testament to that. Sociologist Colin Crouch wrote a book in 2011 about the 'strange non-death of neoliberalism', arguing that the neoliberal model is centred on the needs of corporations and that corporate power actually intensified after the 2008 financial meltdown. This power has been maintained with the help of a robust ideology centred on free markets (though in reality markets are captured by corporations and are maintained by the state) and the superiority of the private sector over the public sector. It advocates privatisation, cuts in public spending, deregulation and tax cuts for businesses and high earners.

This ideology spread through the media from the 1980s , and the media have continued to play a key role in its persistence through a decade of political and economic turmoil since the 2008 crash. They have done this largely via an acute amnesia about the causes of the crisis, an amnesia that helped make policies like austerity, privatisation and corporate tax breaks appear as common sense responses to the problems.

This amnesia struck at dizzying speed. My research carried out at Cardiff University shows that in 2008 at the time of the banking collapse, the main explanations given for the problems were financial misconduct ('greedy bankers'), systemic problems with the financial sector, and the faulty free-market model. These explanations were given across the media spectrum, with even the Telegraph and Sun complaining about a lack of regulation . Banking reform was advocated across the board.

Fast-forward to April 2009, barely 6 months after the announcement of a £500 billion bank bailout. A media hysteria was nowraging around Britain's deficit . While greedy bankers were still taking some of the blame, the systemic problems in finance and the problems with the free-market model had been forgotten. Instead, public profligacy had become the dominant explanation for the deficit. The timeline of the crisis was being erased and rewritten.

Correspondingly, financial and corporate regulation were forgotten. Instead, austerity became the star of the show, eclipsing all other possible solutions to the crisis. As a response to the deficit, austerity was mentioned 2.5 as many times as the next most covered policy-response option, which was raising taxes on the wealthy. Austerity was mentioned 18 times more frequently than tackling tax avoidance and evasion. Although coverage of austerity was polarized, no media outlet rejected it outright, and even the left-leaning press implicitly (and sometimes explicitly) backed 'austerity lite'.

In 2010, the Conservative-Lib Dem government announced £99 billion in spending cuts and £29 billion in tax increases per year by 2014-15. Having made these 'tough choices', from 2011 the coalition wanted to focus attention away from austerity and towards growth (which was, oops, being stalled by austerity). To do this, they pursued a zealously 'pro-business' agenda, including privatisation, deregulation, cutting taxes for the highest earners, and cutting corporation tax in 2011, 2012, 2013, and in 2015 and 2016 under a Conservative government.

These measures were a ramped-up version of the kinds of reforms that had produced the crisis in the first place. This fact, however, was forgotten. These 'pro-business' moves were enthusiastically embraced by the media, far more so than austerity. Of the 5 outlets analysed (The BBC, Telegraph, Sun, Guardian and Mirror), only the Guardian rejected them more frequently than endorsing them.

The idea behind these policies is that what's good for business is good for everyone. If businesses are handed more resources, freed from regulation and handed tax breaks, they will be encouraged to invest in the economy, creating jobs and growth. The rich are therefore 'job creators' and 'wealth creators'.

This is despite the fact that these policies have an impressive fail rate. Business investment and productivity growth remain low, as corporations spend the savings not on training and innovation but on share buy-backs and shareholder dividends. According to the Financial Times, in 2014, the top 500 US companies returned 95 per cent of their profits to shareholders in dividends and buybacks. Meanwhile, inequality is spiralling and in the UK more than a million people are using food banks .

Poverty and inequality, meanwhile, attracted surprising little media attention. Of my sample of 1,133 media items, only 53 had a primary focus on living standards, poverty or inequality. This confirms other researchshowing a lack of media attention to these issues . Of these 53 items, the large majority were from the Guardian and Mirror. The coverage correctly identified austerity as a primary cause of these problems. However, deeper explanations were rare. Yet again, the link back to the 2008 bank meltdown wasn't made, let alone the long-term causes of that meltdown. Not only that, the coverage failed even to identify the role of most of the policies pursued since the onset of the crisis in producing inequality – such as the bank bailouts, quantitative easing, and those 'pro-business' measures like corporation tax cuts and privatisation.

And so it seems we are living with a hyper-amnesia , in which it is increasingly difficult to reconstruct timelines and distinguish causes from effects. This amnesia has helped trap us in a neoliberal groundhog day. The political consensus around the free market model finally seems to be breaking. If we are to find a way out, we will need to have a lot more conversations about how to organise both our media systems and our economies.


Summer , May 29, 2018 at 10:31 am

Tick-Tock.
It depends. Do you believe the worst can be avoided or do you believe the world is already knee deep in all the things we're told to be afraid will happen? There is a big difference between organizing for reform and organizing to break capture.

makedoanmend , May 29, 2018 at 10:42 am

" Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand "

W.B. Yeats

I suppose we can take some succour from the fact that WWI (and the Spanish flu) seemed to be a harbinger of worse to come but we're still here

Doug , May 29, 2018 at 11:21 am

The hyper-amnesia ground hog problem described in the post happens, in part, because the 'centre continues to hold'. It demonstrates the center can, and does, hold. We don't want the centre to hold. We want it to disappear and get replaced by policies and perspectives keen on an economy (and society) that works for all, not just some

makedoanmend , May 29, 2018 at 11:33 am

I know what you're saying and I tend to agree. But the centre to Yeats (my interpretation, anyway) is that there is a cultural centre both apart from but also part of the social centre, and when that centre goes all hell breaks loose. Meaning of events becomes very confused or impossible to understand on many levels.

Then, it's often the little people (and don't go making jokes about leprechauns) that get crushed in the confusion.

Pam of Nantucket , May 29, 2018 at 10:32 am

We should reflect about the root causes of why our information is not informing us. How can decades go by with the meme "smoking has not been conclusively proven to cause cancer" or now "the science of climate change is inconclusive", not to mention countless similar horror stories in pharma. Bullshit about the effectiveness of supply side economics is no different.

Somehow we collectively need to expect and demand more objectivity from our information sources. We fall for the fox guarding hen houses scam over and over, from TARP bailouts, to FDA approvals to WMD claims. Not sure of the answer, but I know from talking with my boomer parents, skepticism about information sources is not in the DNA of many information consumers.

Isotope_C14 , May 29, 2018 at 11:52 am

"One of the saddest lessons of history is this: If we've been bamboozled long enough, we tend to reject any evidence of the bamboozle. We're no longer interested in finding out the truth. The bamboozle has captured us. It's simply too painful to acknowledge, even to ourselves, that we've been taken. Once you give a charlatan power over you, you almost never get it back."

― Carl Sagan, The Demon-Haunted World: Science as a Candle in the Dark

One of Sagan's best, I loaned this out to a not terribly thoughtful acquaintance and I was told it was "too preachy".

I guess Sagan proves himself correct time and time again.

Off The Street , May 29, 2018 at 2:56 pm

Bamboozlers often look to bezzle. That should give anyone pause.

steelhead23 , May 29, 2018 at 12:43 pm

It is also worth noting that a number of newspapers lauded Hitler's rise to power – they overlooked violence against Jews because the trains ran on time. Nor should we ignore disinformation campaigns, led by newspapers (e.g. Hearst and cannabis). In general, each media outlet is a reflection of its owners, most of whom are rich and adverse to any suggestion that we "tax the rich."

sharonsj , May 29, 2018 at 1:59 pm

I've come to the conclusion that we don't have a media anymore. I was watching MSNBC this AM discuss the "missing" 1500 immigrant children. The agency responsible says it calls the people who now have the kids, but most of the people don't call back within the 30-day requirement period.

Now the next logical questions to ask the rep would be: What happens after 30 days? Do you keep calling them? Do send out investigators?" But are these questions asked? No. Instead we get speculation or non-answers. It's the same with every issue.

The internet is not any better. Many articles are just repeating what appears elsewhere with no one checking the facts, even on respected sites. I also got a chain email today regarding petition for a Constitutional Convention. The impetus is a list of grievances ranging from "a congressman can retire after just one term with a full pension" to "children of congressmen don't have to pay back college loans." I already knew most of the claims weren't true but the 131 recipients of the organization I belong to didn't. I did find out that this chain email has been circulating on the internet for five years and it is the work of a conservative groups whose real aim is to stop abortion and make Christianity the law of the land. I was not surprised.

I have said for years that there is no news on the news. And I have repeated this meme for just as long: There is a reason why America is called Planet Stupid.

lewis e , May 29, 2018 at 2:43 pm

On the 1500

https://twitter.com/jduffyrice/status/1000927903759110144

JBird , May 29, 2018 at 3:38 pm

Now the next logical questions to ask the rep would be: What happens after 30 days? Do you keep calling them? Do send out investigators?" But are these questions asked? No. Instead we get speculation or non-answers. It's the same with every issue.

Even competent reporting takes practice, time, and effort, even money sometimes. The same with even half way competent governing. Neither is rewarded, and are often punished, for doing nowadays; asking as a follow-up question "did you call the local police or send over a pair of ICE officers just to politely knock on the door?" Police do people checks all the time. "I haven't see so and so for a week", or "my relative hasn't returned my calls for a month, can you?" It is possible that the paperwork just got lost and asking the guardians/family some questions personally would solve.

But all that is boring bovine excrement, which is just not done.

Jeremy Grimm , May 29, 2018 at 2:41 pm

This post is disheartening in so many ways. Start with "media hysteria" -- adding yet another glib coinage to hide a lack of explanation behind a simple but innapt analogy like the endless "addictions" from which personifications of various abstract entities suffer.

This coinage presupposes a media sufficiently free to be possessed by hysteria. Dancing puppets might with some art appear "hysterical". And the strange non-death of Neoliberalsm isn't so strange or poorly understood in 2018 though the detailed explanation hasn't reached as many as one might have hoped, including the authors of this brief post. Consider their unhappy mashup of thoughts in a key sentence of the first paragraph: "This power has been maintained with the help of a robust ideology centred on free markets (though in reality markets are captured by corporations and are maintained by the state) and the superiority of the private sector over the public sector." The tail of this sentence obviates the rest of the post. And we ought not ignore the detail that Neoliberalism believes in the Market as a solution to all problems -- NOT the 'free market' of neoclassical economics or libertarian ideology.

From "media hysteria" the post postulates "amnesia" of a public convinced of "greedy bankers" who need regulation. In the U.S. the propaganda was more subtle -- at least in my opinion. We were fed the "bad apples" theory mocked in a brief series of media clips presented in the documentary film "Inside Job". Those clips suggest a better explanation for the swift media transitions from banking reform to balanced budgets and austerity with more tax cuts for the wealthy than "amnesia" or "hyper-amnesia". The media Corporations are tightly controlled by the same forces that captured Corporations and -- taking the phrase "the superiority of the private sector over the public sector" in the sense that a superior directs an inferior [rather than the intended(?) sense] -- direct and essentially own our governments.

orangecats , May 29, 2018 at 10:09 pm

"skepticism about information sources is not in the DNA of many information consumers"

This.

bruce wilder , May 29, 2018 at 11:37 am

The essayist complains that poverty and the manifest failures of neoliberalism get little critical attention, but she leads off, "It hasn't escaped many people's attention . . ."

The remarkable thing about public discourse and political and economic news reporting is how superficial it has become, so devoid of a foundation of any kind in history or theory. You can not have an effective critique of society or the economy or anything, if you do not see a system with a history and think it matters. Neoliberalism has become what people say when they think none of it really matters; it is all just noise.

Summer , May 29, 2018 at 4:48 pm

"Neoliberalism has become what people say when they think none of it really matters; it is all just noise."

There is a connection there with movies like Deadpool 2.

JohnnyGL , May 29, 2018 at 1:35 pm

Another thing to recall was how quickly talk of nationalizing banks evaporated. Even Paul Krugman, among others were supporting the idea that "real capitalists nationalize".

Once LIBOR came down, and the lending channels began to reopen, the happy talk ensued and the amnesia kicked in strongly.

I also think that the crisis of neoliberalism echos a problem caused by capitalism, itself. I think David Harvey stated that "capitalism doesn't solve problems, it often just moves them around".

The financial crisis and austerity have now manifested themselves into a media crisis of elites and elite legitimacy (BREXIT, Trump's election, etc). The ability to manufacture consent is running into increased difficulty. I don't think the financial crisis narrative shift helped very much at all. A massive crime requires an equally massive cover-up, naturally.

WheresOurTeddy , May 29, 2018 at 1:41 pm

Why, it's almost as if 90% of all media outlets are owned by 5 multibillion dollar conglomerates, controlled by the top 0.1%, for the purposes of protecting their unearned parasitic power, and the employees making six-to-low-seven figures are on the Upton Sinclair "paycheck demands I not understand it" model.

Or it's amnesia.

Matt Stoller tweet from August 2017, as germane now as ever: "The political crisis we are facing is simple. American commerce, law, finance, and politics is organized around cheating people."

maria gostrey , May 29, 2018 at 2:13 pm

this is why frank sobotka got my vote in the 2016 election:

https://m.youtube.com/watch?v=T-j5XWo1fPI#

KLG , May 29, 2018 at 9:56 pm

A big thumbs up for that! Sobotka was a hero in very dark times.

As my brother-in-law puts it: The American Dream used to be "work hard in a useful job, raise a family of citizens, retire with dignity, and hand the controls to the next generation." Now? It's just "Win the lottery."

Problem is, "The Lottery" is right out of Shirley Jackson.

hemeantwell , May 29, 2018 at 3:12 pm

Or it's amnesia.

Agreed. The author is inclined to interpret at the level of cumulative effect -- apparent forgetting -- and to ignore how fear -- of editors, of owners -- plays any role. Her proposed unveiling of a coercive process becomes yet another veiling of it.

precariat , May 29, 2018 at 3:16 pm

There is not a writer or thinker I agree with more than Matt Stoller.

Avalon Sparks , May 29, 2018 at 5:33 pm

He's one I agree with too. His writings on monopoly activity are excellent.

Pamela More , May 29, 2018 at 9:57 pm

This.

It's a feature, not a bug.

Alex morfesis , May 29, 2018 at 1:54 pm

Sadly the narrative of details is lost to history The German landesbanks who had guaranteed payments in loan pools in the USA were allowed to skirt thru crash and burn by the agencies (moody s&p and your little fitch too) fake and shake ratings process But all things German are magical Having lived thru NYC Mac Corp effective bankruptcy of man hat tan..

it was amusing watching the hand wave given when the city of Berlin actually defaulted .

Ah reality I remember it welll

Eustache De Saint Pierre , May 29, 2018 at 2:23 pm

My own view for what it is worth is that the Guardian pays some lip service to the plight of the UK's " Deplorables ", but like most of it's readership does not really give a damn. A state of being exacerbated by Brexit similar to the situation in the US with Trump. It's much easier to imagine hordes of racist morons who inhabit places that you have no direct experience of, than to actually go & take a look. It's also very easy to be in favour of mass immigration if it does not effect your employment, housing & never likely to spoil your early morning dawn chorus with a call to prayer.

Unfortunately it has been left to the Right to complain about such things as the Rotherham abuse scandal, which involved a couple of thousand young girls, who I suspect are worth less to some than perhaps being mistaken as a racist. There are also various groups made up of Muslim women who protest about Sharia councils behaviour to their sex, but nobody in the media is at all interested.

George Orwell noted that the middle class Left couldn't handle dealing with real working class people, although there isn't the same huge gulf these days, I believe there is still a vestige of it due to the British class system. The Fabians set up shop in the East End around the turn of the last century & directly rubbed shoulders with the likes of Coster Mongers – a combination that led to a strike that was one of the first success stories in the attempt to get a few more crumbs than what was usually allowed to fall from the top table.

As for Mirror readers, I suspect that the majority are either the voiceless or are too busy fighting to avoid the fate of those who find themselves availing of food banks, while being labelled as lazy scroungers all having expensive holidays, twenty kids, about thirty grand a year, while being subjected to a now updated more vicious regime of that which was illustrated by " I, Daniel Blake ".

If Neoliberalism is now being noticed I imagine that it is because of it's success in working it's way up the food chain. After all these same Middle classes for the most part did not care much for the plight of the poor during those Victorian values. Many could not wait to employ maids of all work who slaved for up to fourteen hours a day with only Sunday afternoon's off. The Suffragettes had a real problem with this as their relatively comfortable lives would soon descend into drudgery without their servants.

Coincidentally, the NYT article on Austerity Britain is the closest I have read to an accurate picture that I have seen for a good while.

David , May 29, 2018 at 2:39 pm

It's also not a new thing. British media worship of neoliberalism has been growing since the 1980s, at the same time as newspapers have been closing and media sources of all kinds laying off their staff. 2008 was a temporary blip, and since the average journalist has the attention span of a hamster, it was back to usual a few months later. Once the crash stopped being "news" old patterns reasserted themselves. I wonder, incidentally, how many economics journalists in the UK actually remember the time before neoliberalism?

precariat , May 29, 2018 at 2:54 pm

"And so it seems we are living with a hyper-amnesia"

Consuming corporate media is increasingly a bizarro-world experience. Even something like the Trump scandal/constitutional crisis/investigation seems like the arrogant internecine warfare of corrupt factions of the establishment. Meanwhile, Americans are increasingly living out of their cars.

The corporate media forgets the causes of the worst economic crisis since the Depression, and it put Trump in a position to be elected. Trump was the Republican nominee because he was relentlessly promoted by the media -- because ratings, because neoliberal rigged markets.

Break up the media monopolies, roll back Citizens United, enforce the fairness doctrine.

Pamela More , May 29, 2018 at 9:55 pm

Agree.

Slight edit

" Consuming corporate media is increasingly a bizarro-world experience the Trump scandal/constitutional crisis/investigation is nothing other than internecine warfare between corrupt factions of the establishment."

JBird , May 29, 2018 at 3:24 pm

I think there are several issues here for Americans, which can partially be applied to the Europeans.

First, the American nation as whole only has short term memory. It is our curse.

Second, those with the money spend a lot of money, time and effort the late 19th century covering up, massaging, or sometimes just creating lies about the past. American and British businesses, governments, and even private organizations are masters at advertising and propaganda. Perhaps the best on Earth.

Third, the people and the institutions that would counter this somewhat, independent unions, multiple independent media, tenured professors at functioning schools, even non-neoliberalized churches, and social organizations like bowling, crocheting, or heck, the Masons would all maintain a separate continuing body of memory and knowledge.

Lastly, we are all freaking terrified somewhere inside us. Those relative few who are not are fools, and most people, whatever their faults, truly are not fools. Even if they act like one. Whatever your beliefs, position, or knowledge, the knowing of the oncoming storm is in you. Money or poverty may not save you. The current set of lies, while they are lies, gives everyone a comfortable known position of supporting or opposing in the same old, same old while avoiding thinking about whatever catastrophe(s) and radical changes we all know are coming. The lies are more relaxing than the truth.

Even if you are one of society's homeless losers, who would welcome some changes, would you be comfortable thinking about just how likely it is to be very traumatic? Hiding behind begging for change might be more comfortable.

precariat , May 29, 2018 at 4:25 pm

"Even if you are one of society's homeless losers, who would welcome some changes, would you be comfortable thinking about just how likely it is to be very traumatic? Hiding behind begging for change might be more comfortable."

On the contrary, the upheaval the "losers" have been subjected to will be turned around and used as a just cause for rectification. Trumatic consequences can be unpredictable and this is why society should have socio-economic checks and balances to prevent an economic system running amok. Commonsense that necessitates amnesia for neoliberalism to seem viable.

Peter Phillips , May 29, 2018 at 4:54 pm

Facing the current scenario in which we have:

1. Oligarchs having captured thoroughly the media, the legislatures and the judiciary, (as well as large parts of what might be construed as "liberal" political organisations e.g. the Democratic Party of the USA)

2. the seemingly inexorable trend to wealth concentration in the hands of said oligarchs

..one asks oneself.."What is one to do?"

My own response, (and I acknowledge straight off its limited impact), is to do the following:

1. support financially in the limited ways possible media channels such as Naked Capitalism that do their level best to debunk the lies and deceptions perpetrated by the oligarchs

2. support financially social organisations and structures that are genuinely citizen based and focused on a sustainable future for all

3. Do very very limited monitoring of the oligarch's "lies and deceptions" (one needs to understand one's enemies to have a chance to counter them) and try on a personal level, in one's day to day interactions, to present counter arguments

We cannot throw in the towel. We must direct our limited financial resources and personal efforts to constructive change, as, for the 99%..there are no "bunker" to run to when the "proverbial" hits the fan..as it must in the fullness of time.

Spring Texan , May 29, 2018 at 8:21 pm

Yep. One has to go ahead and do what one can. It all makes a difference. Thanks for your strategy, Peter Phillips. Limited impact is not no impact, and we don't have the luxury of despairing because there is only a bit we can do.

sgt_doom , May 29, 2018 at 8:10 pm

Yet this has been going on forever – – this past Sunday, for the first time I recall, I finally heard an accurate Real News story filed on the Bobby Kennedy assassination (50th anniversary coming this June 6, 2018) by the BBC World Service.
They actually noted that there were multiple shooters, that Sen. Kennedy was shot from behind, not the front where Sirhan was located, etc., etc.
I guess we do occasionally witness Real News – – – just that it takes 50 years or so to be reported . . .

[May 27, 2018] How Institutional Dysfunction Has Enabled Poor Economic Policy Thinking by Rob Johnson

Notable quotes:
"... Democracy in America ..."
"... American Economic Review ..."
"... Journal of Political Economy ..."
"... Quarterly Journal of Economics ..."
"... Review of Economic Studies ..."
"... There is in the US a concerted effort to praise capitalism as some sort of god-given system and to defame all other systems. ..."
"... "Stocks have reached what looks like a permanently high plateau." ..."
"... "The problem this essay addresses can be framed in terms of two quotations from Alexis de Tocqueville. The first comes from his famous speech in the French Chamber of Deputies just prior to the outbreak of the Revolution of 1848: "We are sleeping on a volcano .do you not see that the earth is beginning to tremble. The wind of revolt rises; the tempest is on the horizon." The second is from Democracy in America: "When the past no longer illuminates the future, the spirit walks in darkness." ..."
"... "These fools in Wall Street think they can go on forever! They can't!" ..."
"... "a giant suction pump had by 1929 to 1930 drawn into a few hands an increasing proportion of currently produced wealth. This served then as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied themselves the kind of effective demand for their products which would justify reinvestment of the capital accumulation in new plants. In consequence as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When the credit ran out, the game stopped" ..."
May 27, 2018 | www.nakedcapitalism.com

... ... ...

By Rob Johnson, Institute for New Economic Thinking President,
Senior Fellow and Director, Franklin and Eleanor Roosevelt Institute and Thomas Ferguson, Director of Research, Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website

...

The problem this essay addresses can be framed in terms of two quotations from Alexis de Tocqueville. The first comes from his famous speech in the French Chamber of Deputies just prior to the outbreak of the Revolution of 1848: "We are sleeping on a volcano .do you not see that the earth is beginning to tremble. The wind of revolt rises; the tempest is on the horizon." The second is from Democracy in America : "When the past no longer illuminates the future, the spirit walks in darkness."

In 2018, the darkness is all too palpable: A chain of economic reverses that no prominent economists, central bankers, or policymakers anticipated has combined with other shocks from technology, wars, and migrations to produce the political equivalent of the perfect storm. The world financial meltdown of 2008 set the cyclone spinning. As citizens watched helplessly while their livelihoods, savings, and hopes shriveled, states and central banks stepped in to rescue the big financial institutions most responsible for the disaster. But recovery for average citizens arrived only slowly and in some places barely at all, despite a wide variety of policy experiments, especially from central banks.

The cycle of austerity and policy failure has now reached a critical point. Dramatic changes in public opinion and voting behavior are battering long entrenched political parties in many countries. In many of the world's richest countries, more and more citizens are losing faith in the very ideas of science, expertise, and dispassionate judgment -- even in medicine, as witness the battles over vaccines in Italy, the US, and elsewhere. The failure of widely heralded predictions of immediate economic disaster when the UK voted to leave the European Union and Donald Trump became President of the United States has only fanned the skepticism.

Placing entire responsibility for this set of plagues on bad economic theory or deficient policy evaluation does not make sense. Power politics, contending interests, ideologies, and other influences all shaped events. But from the earliest days of the financial collapse, reflective economists and policymakers nourished some of the same suspicions as the general public. Like the Queen of England, they asked plaintively, "Why did no one see it coming?"

Answers were not long in arriving. Critics, including more than a few Nobel laureates in economics, pointed to a series of propositions and attitudes that had crystallized in economic theory in the years before the crisis hit. [1] Economists had closed ranks as though in a phalanx, but the crisis showed how fragile these tenets were. They included:

A resolute unwillingness to recognize that fundamental uncertainty shadows economic life in the real world. Neglect of the roles played by money, credit, and financial systems in actual economies and the inherent potential for instability they create. A fixation on economic models emphasizing full or nearly complete information and tendencies for economies either to be always in equilibrium or heading there, not just in the present but far into the indefinite future. A focus on supply as the key to economic growth and, increasingly after 1980, denials that economies could even in theory suffer from a deficiency of aggregate demand. Supreme confidence in the price system as the critical ordering device in economies and the conviction that getting governments and artificial barriers to their working out of the way was the royal road to economic success both domestically and internationally.

Initially, debates over this interlocking system of beliefs mostly sparked arguments about the usefulness of particular tools and analytical simplifications that embodied the conventional wisdom: Dynamic stochastic general equilibrium models; notions of a "representative agent" in macroeconomics and the long run neutrality of money; icy silence about interactions between monetary rates of interest and ruling rates of profit, or the failure of labor markets to clear.

Increasingly, however, skeptics wondered if the real problems with economics did not run deeper than that. They began to ask if something was not radically wrong with the structure of the discipline itself that conduced to the maintenance of a narrow belief system by imposing orthodoxies and throwing up barriers to better arguments and dissenting evidence.

The empirical evidence now seems conclusive: Yes.

"Top 5" Dominance for Promotion and Tenure

Studies by James Heckman demonstrate the critical gatekeeping role of five so-called "top journals" in recruitment and promotions within economics as a field. [2] Four of the journals -- the American Economic Review , the Journal of Political Economy , the Quarterly Journal of Economics , and the Review of Economic Studies -- are Anglo-American centered and published in the US or the UK as is the fifth, Econometrica , though it is sponsored by the Econometric Society, which has long involved scholars from Scandinavia and other countries.

Heckman's research shows that the number of Top 5 (T5) articles published by candidates plays a crucial role in the evaluation of candidates for promotion and tenure. This is true not only in leading departments but more generally in the field, though the influence of the count weakens in lower ranked institutions.

The Great Disjunction

Heckman compares citations in Top 5 journals with articles frequently cited by leading specialists in various fields and with publication histories of Nobel laureates and winners of the Clark Medal. He is crystal clear that many important articles appear in non-T5 journals -- a finding supported by other studies. [3] This evidence, he argues, highlights a "fundamental contradiction" within the whole field: "Specialists who themselves publish primarily in field journals defer to generalist journals to screen quality of their colleagues in specialty fields."

Citations as Pernicious Measures of Quality in Economics

Heckman draws attention to the increase in the number of economists over time and the relative stability of the T5. He argues that his findings imply that the discipline's "reluctance to distribute gatekeeping responsibility to high quality non-T5 Journals is inefficient in the face of increasing growth of numbers of people in the profession and the stagnant number of T5 publications."

Other scholars who have scrutinized what citations actually measure underscore this conclusion. Like Heckman, they know that citation indices originated from efforts by libraries to decide what journals to buy. They agree that transforming " journal impact factors" into measures of the quality of individual articles is a grotesque mistake, if only because of quality variation within journals and overlaps in average quality among them. Counts of journal articles also typically miss or undercount books and monographs, with likely serious effects on both individual promotion cases and overall publication trends in the discipline. As Heckman observes, the notion that books are not important vehicles for communication in economics is seriously mistaken.

Analytical efforts to explain who gets cited and why are especially thought provoking. All serious studies converge on the conclusion that raw counts can hardly be taken at face value. [4] They distort because they are hopelessly affected by the size of fields (articles in bigger fields get more citations) and bounced around by self-citations, varying numbers of co-authors, "halo effects" leading to over-citation of well-known scholars, and simple failures to distinguish between approving and critical references, etc. One inventory of such problems, not surprisingly by accounting professors, tabulates more than thirty such flaws. [5]

But cleaning up raw counts only scratches the surface. Heckman's study raised pointed questions about editorial control at top journals and related cronyism issues. Editorial control of many journals turns over only very slowly and those sponsored by major university departments accept disproportionately more papers from their own graduates. [6] Interlocking boards are also fairly common, especially among leading journals. [7] Carlo D'Ippoliti's study of empirical citation patterns in Italy also indicates that social factors within academia figure importantly: economists are prone to cite other economists who are their colleagues in the same institutions, independently of the contents of their work, but they are even more likely to cite economists closer to their ideological and political positions. [8] Other research confirms that Italy is not exceptional and that, for example, the same pattern shows up in the debates over macroeconomics in the US and the UK after 1975. [9]

Other work by Jakob Kapeller, et al., and D'Ippoliti documents how counting citations triggers a broad set of pathologies that produces major distortions. [10] Investing counts with such weighty significance, for example, affects how both authors and journal editors behave. Something uncomfortably close to the blockbuster syndrome characteristic of Hollywood movies takes root: Rather than writing one major article that would be harder to assimilate, individual authors have strong incentives to slice and dice along fashionable lines. They mostly strive to produce creative variations on familiar themes. Risk-averse gatekeepers know they can safely wave these products through, while the authors run up their counts. Journal editors have equally powerful incentives: They can drive up their impact factors by snapping up guaranteed blockbusters produced by brand names and articles that embellish conventional themes. Kapeller, et al. suggest that this and several other negative feedback loops they discuss lead to a form of crowding out, which has particularly pernicious effects on potential major contributions since those are placed at a disadvantage by comparison with articles employing safer, more familiar tropes. [11] The result is a strong impetus to conformism, producing a marked convergence of views and methods.

These papers, and George Akerlof in several presentations, also show that counting schemes acutely disadvantage out-of-favor fields, heterodox scholars, and anyone interested in issues and questions that the dominant Anglo-Saxon journals are not. [12] This holds true even though, as Kapeller et al. observe, articles that reference some contrary viewpoints actually attract more attention, conditioning on appearance in the same journal -- an indication that policing the field, not simply quality control, is an important consideration in editorial judgment. One consequence of this narrowing is its weirdly skewed international impact. Reliance on the current citations system originated in the US and UK, but has now spread to the rest of Europe and even parts of Asia, including China. But T5 journals concentrate on articles that deal with problems that economists in advanced Anglo-Saxon lands perceive to be important; studies of smaller countries or those at different stages of development face higher publication hurdles. The result is a special case of the colonial mind in action: economics departments outside the US and UK that rely on "international" standards advantage scholars who focus their work on issues relevant to other countries rather than their own.


Ed Walker , , May 26, 2018 at 6:20 am

I'm just stunned that this paper doesn't mention the seminal work on the problem, Marion Fourcade's paper The Superiority of Economists. https://www.aeaweb.org/articles?id=10.1257/jep.29.1.89

Oh wait, Fourcade and her colleagues are sociologists, not economists, so no reason to consider their research and thinking. Also, and not for nothing, she and they are French, and read Pierre Bourdieu who has done a lot of work on the sociology of academics, focused on France but widely applicable.

And here's something interesting; there is no mention of the funding of economics at universities and colleges. So, no mention of the hundreds of millions the filthy rich have poured into the field. Of course, they heatedly deny that matters. A recent tweet from a Geroge Mason/Mercatus prof was livid at the very suggestion that Koch money influenced hiring decisions.

And that's before we get into the gendered nature of economics, or it's political usage by ideologically-driven politicians looking for "experts" to support their preconceptions.

There is a lot more and someone needs to say it out loud in clear, uncoded language.

The Rev Kev , May 26, 2018 at 6:42 am

Just a thought line here. I have heard and read conservatives say that "Politics is downstream from culture" and I get what they are saying. You change the culture and that predetermines the politics that you get. In reading this article, the thought struck me that perhaps the reason that economics as a profession has been corrupted so badly is that maybe conservatives consider government to be downstream of economics. Thus you control what economics theories are permitted to be discussed and that gives them the governments that they want.

Steve Ruis , May 26, 2018 at 9:27 am

I support your contention. There is in the US a concerted effort to praise capitalism as some sort of god-given system and to defame all other systems. Venezuela's current problems are due to socialism, not bad management, of course. Of course, since the wealthy are doing oh so well under the status quo, they are bound to favor it, but they are not just favoring it, they are nailing it down onto our culture.

Andrew Watts , May 26, 2018 at 9:40 am

There is in the US a concerted effort to praise capitalism as some sort of god-given system and to defame all other systems.

The Marxist economist Richard Wolff made the claim that economists are simply cheerleaders for capitalism in an interview on Chapo Trap House, He elaborated and substantiated this claim by saying that business schools had to be founded because economics departments were useless as a method of educating a cohort of business specialists.

Norb , May 26, 2018 at 9:46 am

Very succinct and thoughtful indeed. Remember Ronald Reagan's now infamous, "Government is the Problem" mantra. The real cultural warriors were the neoliberal terrorists who are hell bent on commodifying the entire planet for their own exploitation- masked in the language of "freedom" and "democracy".

This line of thought is also important in that your framing cuts to the core of the cognitive problem attempting to deal with economics, namely, it is a religion. I would define a religion as a system of faith and worship that is driven by a particular interest. All the wordy-ness and arm waiving is just an attempt to obfuscate this simple truth. Persecution of the unfaithful is also a dead giveaway.

This whole notion that the current reigning economics profession is ready, or attempting to "see the light" is somewhat amusing, or in another sense should be insulting considering the social damage they have caused, and are continuing to inflict on the broader citizenry. Burning at the stake is more appropriate, and maybe these slight rumblings of contrition are a sign that some might be getting worried that their "economic" program has gone too far.

When what goes on in the human mind looses connection to events in the real world, changes must be made in order to remain sane. The current orthodoxy is also ultimately doomed to failure in that what is the point of creating and maintaining a deluded and demoralized citizenry? That is a recipe for internal stagnation and external conquest. It would only be a successful strategy if the elite are able to move on after the broader society falters and fails. That thought is almost too cynical to contemplate. But that might explain why the .001% remains the .001%. The current economic priests are starting to feel the pressure because their flocks are beginning to realize that their everyday experience no longer matches the sermons they receive.

Time for a new sermon.

animalogic , May 27, 2018 at 12:59 am

Time to throw out the "priests" and their vicious "gods"

mle detroit , May 26, 2018 at 9:52 am

Following Rev Kev's point and Ed Walker's third paragraph, have there been any studies of the sources of gifts, underwriting, and other purchases of academic work at the most "influential" economics and business economics departments?

John Wright , May 26, 2018 at 9:22 am

In the academic side of the economics profession, it would seem to be prudent to "go with the flow."

Even the economists who recognized problems in 2008, such as Steve Keen and Dean Baker, are not celebrated.

In our society, it seems more likely that some powerful group or individual wants to do something and then proceeds to find an economist to support that action, via an editorial or media appearance, perhaps it is "free" trade, more immigration, easy money, tight money, quantitative easing, outsourcing, insourcing, charter schools, or austerity.

I suspect there are economists who attempt to accurately anticipate economic events.

But they work for hedge funds and private wealth management firms.

And what is the incentive for a prominent public economist to warn of economic problems that may have been caused by government and well-connected interests?

If someone, such as Alan Greenspan, gave early notice of sub-prime/mortgage backed security issues how would he have been better off?

It suggests a central banker career strategy that, if one observes a large economic problem brewing, retire and publish your book before the SHTF.

If the career central banker actually warned/took actions to circumvent a financial bubble and the bubble popped anyway, they could be tagged as a goat for causing the crisis.

Maybe the economics profession is functioning as one would expect?

Michael C. , May 26, 2018 at 9:41 am

One has to wonder, if the elite economists who have defined the parochial and narrow scope of what capitalism is, how it works, and who wins and loses in the system, and maybe in particular it's late 20th Century form, neroliberalism, had maybe expanded their self-serving views to include a Marxian critique and analysis of they might not had been so stupid?

That's not to say the Marx had all the answers, but is only to say that if you presuppose the outcome you want and buttress it with only the information that supports (no matter how poorly) those outcomes, you end up with crisis and the contradictions within capitalism resulting in the failures described above.

Universities and Econ departments don't allow the wide critical view needed into their schools, and no matter what you think of Marx and his ideas, they should at least be the starting point in the discussion when approaching economic policy. The right wing shift in the governments and the people's of the world is not some unexpected outcome but is directly related to a system that builds in economic disparity, short-term planning (due to emphasis on next quarters profits and stock price), and an emphasis on winner take all rather than human needs.

It's not "the economy, stupid." It"s the stupid system.

Norb , May 26, 2018 at 10:15 am

The problem with the American system is that its founding principles, that all men are created equal, and are endowed with certain, God given, unalienable rights, runs in contradiction to the chosen economic models of building society. Slavery and Capitalism are antithetical to these sentiments. Capitalism might be workable if restrained and heavily regulated, but why bother with that because human corruption will always find a way to undermine such a system; it is inherently weak and guarantees suffering will be born by the masses- Brexit will provide the perfect example as predicted by Yves.

A heavily regulated capitalism is socialism by another name.

The same, self-serving arguments are also made about war. The thought that humans could live in peace is treated as some unrealistic and insane idea. Instead of selecting from the human population for cooporation and peace-loving sensibilities, the minority sociopathic murders are allowed to run wild.

Real human "progress" will be made when the peace faction gains supremacy. But that is impossible as long as the economic system upon which all human subsistence depends remains entrenched in competition and striving to hoard against fears of scarcity.

FDR had it right, although imperfect, society was moving in the right direction. We live in a world of abundance that is being squandered. The only way to avoid ultimate destruction is to embrace this abundance as stewards and conservators instead of fearful exploiters.

Conserve the world by embracing sustainable living. Now that is a powerful political message. So powerful, it will be met with the full force of the sociopathic murders currently in charge of human societies.

What else to say, but prepare yourself.

Ed Walker , May 26, 2018 at 5:53 pm

The equality stuff is in the Declaration of Independence, not the Constitution. The latter is specifically devoted to protecting the interests of property holders, specifically including slavers. This is not surprising. The Founders were heavily influenced by John Locke. Locke was a slaver himself https://www.jstor.org/stable/2709512?seq=1#page_scan_tab_contents . And remember that Lockean ideas are based on protecting private property from the random predation of absolute monarchs.

Chris , May 26, 2018 at 12:19 pm

OMG, Michael C.

"Neroliberalism"

That's an amazing slip of the keys. It explains a ton too. I love that it combines the term which the people discussed in this article usually deride with the name of the last Roman emperor who is renowned for extravagance and tyranny.

Brilliant!

animalogic , May 27, 2018 at 1:20 am

I agree with your comment whole heartedly.
But:"the name of the last Roman emperor who is renowned for extravagance and tyranny."(& please forgive my quibble) Nero was certainly not the last emperor to have had such characteristics.
(Elagabalus springs to mind)

J Sterling , May 27, 2018 at 6:41 am

It's been said that you can tell how dominated economics is by a particular minority of society, by the economists' word for phenomena where workers are paid more for their labor being "disease". As in Baumol's Disease for example.

R. BAIRD , May 26, 2018 at 9:58 am

Both sides of the political divide often go awry simply because they refuse to acknowledge the role of human nature. We mere mortals know this as we are the full recipients of the "free market," the good, the bad, and the extremely ugly. The likes of Alan Greenspan in the rarified air strata were shocked, shocked, shocked! I bring you a small excerpt from Mr. Greenspan's testimony before the Government Oversight Committee of the House of Representatives. Still clueless, he does acknowledge a flaw:

Pressed by Waxman, Greenspan conceded a more serious flaw in his own philosophy that unfettered free markets sit at the root of a superior economy.

"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms," Greenspan said.

Waxman pushed the former Fed chief, who left office in 2006, to clarify his explanation.

"In other words, you found that your view of the world, your ideology, was not right, it was not working," Waxman said.

"Absolutely, precisely," Greenspan replied. "You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well."

Jesper , May 26, 2018 at 10:12 am

This bit:

In many of the world's richest countries, more and more citizens are losing faith in the very ideas of science, expertise, and dispassionate judgment – even in medicine, as witness the battles over vaccines in Italy, the US, and elsewhere.

Might be believed by some, others might believe that more and more citizens are sceptical about the practioners ability to provide expertise and dispassionate judgment. From my own perspective I do believe in science, expertise and dispassionate judgment but I don't believe that many professional economists have much expertise (outside of knowledge of basic statistics and statistics software) or that they practice dispassionate judgment.

As far as being sceptical of medicine then I'll post this link again:
https://medium.com/@drjasonfung/the-corruption-of-evidence-based-medicine-killing-for-profit-41f2812b8704

Pharmaceutical companies are not in business to heal people, they are in business -> They do whatever they legally can to make money and they even put pressure on the legislative to get more opportunities to legally make more money.
The article contains this link to the Lancet relating to "the reproducibility and reliability of biomedical research":
https://www.thelancet.com/journals/lancet/article/PIIS0140-6736%2815%2960696-1/fulltext

The case against science is straightforward: much of the scientific literature, perhaps half, may simply be untrue. Afflicted by studies with small sample sizes, tiny effects, invalid exploratory analyses, and flagrant conflicts of interest, together with an obsession for pursuing fashionable trends of dubious importance, science has taken a turn towards darkness.

Ted , May 26, 2018 at 11:25 am

The problem is widespread, and now well recognized. Here, for example, from psychology (also a juggernaut of social science influence)

https://www.scientificamerican.com/article/massive-international-project-raises-questions-about-the-validity-of-psychology-research/

If we looked and any other (social) scientific discipline, we'd get the same result.

The articles from medium and The Lancet you link highlight the problems well enough, the system is corrupt from top to bottom. Another examples of where misguided emphasis on juicing "metrics" (for personal gain) rather than taking one's time to develop expertise and do things correctly is literally killing people, or simply ruining lives (as if that is some consolation).

Ed , May 26, 2018 at 10:16 am

Were really corrupt institutions and professions ever supposed to make good decisions?

Jim Haygood , May 26, 2018 at 10:26 am

Economies are inherently cyclical. Keynesianism, in its original incarnation, envisaged surpluses during economic expansions to offset the fiscal deficits provoked by recessions. But surpluses are a distant memory -- now it's pedal to the metal all the time, just to keep a becalmed, debt-choked economy treading water.

Credit is also procyclical. It was severely rationed during and after the 2008 meltdown. Now covenant-lite bonds prevail for corporate financing, while individuals can get 3 percent down FHA loans to buy houses at prices that exceed the 2006 peak, with 33 times leverage. Prudent!

What role can academics play in this endless sisyphean tragedy? None, probably. Warning of recession invites career risk for economists, so most of them just won't do it. Like the Hazmat team, economists show up after the train wreck to help with the cleanup. Federal Reserve economists are engineering that crack-up right now, with their fruitcake bond dumping campaign.

By 2020, they'll be tanned, rested and ready for their next exciting outing. :-)

Summer , May 26, 2018 at 11:40 am

As others have stated, there are economists out there who have already seen through the current dogmas.
Michael Hudson is one and another that comes to mind is Chilean economist Manfred Max-Neef. A transcript of an interview with him from 2010:

https://www.democracynow.org/2010/9/22/chilean_economist_manfred_max_neef_us

An excerpt to perk interest:

"I worked for about ten years of my life in areas of extreme poverty in the Sierras, in the jungle, in urban areas in different parts of Latin America. And at the beginning of that period, I was one day in an Indian village in the Sierra in Peru. It was an ugly day. It had been raining all the time. And I was standing in the slum. And across me, another guy also standing in the mud -- not in the slum, in the mud. And, well, we looked at each other, and this was a short guy, thin, hungry, jobless, five kids, a wife and a grandmother. And I was the fine economist from Berkeley, teaching in Berkeley, having taught in Berkeley and so on. And we were looking at each other, and then suddenly I realized that I had nothing coherent to say to that man in those circumstances, that my whole language as an economist, you know, was absolutely useless. Should I tell him that he should be happy because the GDP had grown five percent or something? Everything was absurd.

So I discovered that I had no language in that environment and that we had to invent a new language. And that's the origin of the metaphor of barefoot economics, which concretely means that is the economics that an economist who dares to step into the mud must practice. The point is, you know, that economists study and analyze poverty in their nice offices, have all the statistics, make all the models, and are convinced that they know everything that you can know about poverty. But they don't understand poverty. And that's the big problem. And that's the big problem. And that's why poverty is still there. And that changed my life as an economist completely. I invented a language that is coherent with those situations and conditions."

It's a good interview of someone developing an alternate view.
(There are critiques and studies of wealth that I think we need more of as well, only poverty is thought of as pathological – a subject which he tackles.)

JEHR , May 26, 2018 at 11:50 am

And just maybe, human goodness and human evil have a cyclical nature too and we are just in the bad part of the cycle right now. However, it may be true also that the time period of 1950 to 1970 was an anomaly that may not recur, and that the true nature of human beings is to lie, to cheat, to steal, to commit fraud and practice multifarious corruptions and violence. When you look at the widest version of history, human nature is not so benign.

Summer , May 26, 2018 at 12:25 pm

In a nutshell, the American consumer was highly important from 1950 to 1970 until the rest of the world recovered more from 2 world wars.

Summer , May 26, 2018 at 12:10 pm

1950 to 1970 the rest of the industrial world was decimated after 2 world wars.
And more countries wanted independence from colonialism (less loot spread around, however thinly, back home – though not totally disappeared).

Scott1 , May 26, 2018 at 1:57 pm

Psychology turns into sociology. Either the system is making everyone prosperous and happy or it is making everyone desperate.
Desperation is the American way. The comfort of misery seen as pathological in the individual is a more general pathology. Too much bile in the system.
"The Sticky Floor." is the phrase my cousin invented. She is a leader in Women's Studies. It may well apply more correctly that "The Glass Ceiling". Overall the turn in the article to the dearth of women economists threw me.
As science enables engineering, economics enables financial engineering. The predominant financial engineer of our times is Meyer Lansky. Organized business, the "real" economy of General Motors and Dow & Dupont & General Dynamics & Raytheon, ITT, Apple, Google, Microsoft all now have adopted Meyer Lansky Financial Engineering.
It was made legal as economic theory and practice under Clinton Unit 1's reign.
The preeminent financial engineer is David Cay Johnston. He called Dean Baker a "real" economist as opposed to Michael Hudson. I prefer Hudson to Dean myself. Nobody knows everything. This is why all you really have to know is the goal. "You cannot go wrong if your goals are correct." is what Einstein said.
The main reason for misery is poverty, which is not having enough to operate the household without debt peonage.
The United States and the EU as run by Central Banks have it so only the selected have infinite access to currency. The States don't have enough money so the System prefers they deny their people things like education and healthcare, and sell bonds.
It is okay for the Federal Government to tax or not tax but the States must tax to fill their treasuries.
Alan Greenspan's philosophy came from Ayn Rand whose world view encouraged the exclusive access and economic security to have and do whatever they, the rich, people like Elon Musk or Jeff Bezos, envisioned as ideal for them, and them only. (They live in airport land with a pond.)
It came from Russian Dystopian Objectivism and produces Dystopia.
The American Philosophy, that which made America loved is American Eclectic Pragmatism.
The wrong goal is to make only those in Finance rich. The right goal is to make everyone as much a jet setter as the jet setters.
Until the goal of Economists is blatantly aimed at relative equality of life, the discipline is simply on the wrong track and is never going to be worth doing.
Thanks.

JBird , May 26, 2018 at 3:29 pm

Approved economics has nothing to do with actually understanding or solving anything except be a useful smokescreen for wealthy special interests. I have gotten a more accurate and functional understanding of overall economics from classes, and books in anthropology, political science, and history than in any classes labeled as "economics."

That is really sad. It is also very deliberate. Those who say modern economic studies have been stripped of anything but neoliberal/libertarian economic ideas are right. Even then, it seems that it has been either further simplified, or abstracted, to further channel any thoughts away from real life.

Let's put it this way. Philosophy can be used to actual ask and study questions or it can be used to debate how many angels can fit on the head of a pin. Guess what what modern mainstream economics does?

Sound of the Suburbs , May 26, 2018 at 4:09 pm

There are inherent flaws in neoclassical economics that have already been discovered.

The 1920s roared with debt based consumption and speculation until it all tipped over into the debt deflation of the Great Depression. No one realised the problems that were building up in the economy as they used an economics that doesn't look at private debt, neoclassical economics.

The two elements of neoclassical economics that come together to cause financial crises.

1) It doesn't consider debt
2) It holds a set of beliefs about markets where they represent the rational decisions of market participants; they reach stable equilibriums and the valuations represent real wealth.

Everyone marvels at the wealth creation of rising asset prices, no one looks at the debt that is driving it.

https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.52.41.png

The "black swan" was obvious all along and it was pretty much the same as 1929.

1929 – Inflating US stock prices with debt (margin lending)
2008 – Inflating US real estate prices with debt (mortgage lending)

"Stocks have reached what looks like a permanently high plateau." Irving Fisher 1929.

An earlier neoclassical economist believed in price discovery, stable equilibriums and the rational decisions of market participants, and what the neoclassical economist believes about the markets means they can't even imagine there could be a bubble.

The amount of real wealth stored in the markets becomes apparent once the bubble has burst.

The debt overhang (ref. graph above) is dragging the US economy down and is the cause of Janet Yellen's inflation mystery, but they don't know because they don't consider debt. It's called a balance sheet recession.

The problems that led to 2008 come from private debt in the economy and the problems now come from the overhang of private debt in the economy, but they are using an economics that doesn't consider private debt.

They don't stand a chance.

Sound of the Suburbs , May 26, 2018 at 4:24 pm

"The problem this essay addresses can be framed in terms of two quotations from Alexis de Tocqueville. The first comes from his famous speech in the French Chamber of Deputies just prior to the outbreak of the Revolution of 1848: "We are sleeping on a volcano .do you not see that the earth is beginning to tremble. The wind of revolt rises; the tempest is on the horizon." The second is from Democracy in America: "When the past no longer illuminates the future, the spirit walks in darkness."

How about this quote ..

"These fools in Wall Street think they can go on forever! They can't!" President Theodore Roosevelt 1909.

The US has just forgotten its own history; this is what it was like at the end of the 19th and beginning of the 20th century. Capitalism was running wild, but the difference was there used to be a critical press.

Catch up on US history.

"PR! A Social History of Spin" Stuart Ewen

Finding out what the private sector uses PR for also helps you understand their motivations, it's worth reading.

JBird , May 26, 2018 at 10:58 pm

Our Esteemed Elites are mostly college educated which hopefully includes American history. But maybe it's become like modern college economics. Stripped of inconvenient information.

I agree that beyond the normal American nation's ultra short memory, there is a regular effort by some to eliminate any inconvenience ones. If history is a career or even a hobby you will likely know much about America history bad (and good too!) that goes zooop into the memory hole. It becomes a boring national hagiography. Sanitized. But that shouldn't be.

But STEM courses are so much more important than fluff like history.

Sound of the Suburbs , May 27, 2018 at 5:56 am

In history we study what the elites are up to, we don't pay much attention to what is going on with general population.

This does.

ObjectiveFunction , May 27, 2018 at 1:46 am

Fantastic piece, Yves.

As with a few other commenters here, the essay puts me in mind of historiography, to wit E.H. Carr whose 'before studying history, study the historians' became the fighting slogan for the radical history movement of the 1960s:

"The facts are really not at all like fish on the fishmonger's slab. They are like fish swimming about in a vast and sometimes inaccessible ocean; and what [facts] the historian catches will depend, partly on chance, but mainly on what part of the ocean he chooses to fish in and what tackle he chooses to use."

ObjectiveFunction , May 27, 2018 at 2:07 am

"Economists had closed ranks as though in a phalanx, but the crisis showed how fragile these tenets were. They included:
1. A resolute unwillingness to recognize that fundamental uncertainty shadows economic life in the real world."

. And for this one, do I even need to requote Upton Sinclair?!

Economists and central bankers are our modern day priest-astrologers. We *need* them to know! to appease Bel-Marduk and Istar, to ensure a fruitful harvest, the birth of worthy sons

.and also, for a small commission, to manage our tax collections/ debts/ alehouses/ brothels [hat tip to Prof Hudson].

Sound of the Suburbs , May 27, 2018 at 5:59 am

This is about the UK, but applies equally to the US as we are all doing the same neoliberal things.

Why isn't the economy growing?

We shouldn't get side tracked with productivity as productivity is GDP per hour worked and we need to grow GDP.

What is GDP?

The amount of money spent into the economy by consumers, businesses and the Government plus the income we receive from the trade balance with the rest of the world.

Now we know what GDP is we can immediately see why austerity is contractionary. The cut in Government spending comes straight off GDP (someone tell Macron).

The aim is to increase the amount of goods and services within the economy at the same rate as the demand for those goods and services, whilst increasing the money supply to allow those extra goods and services to be purchased.

Milton Freidman understood the money supply had to rise gradually to grow the economy with his "Monetarism". He thought that central bank reserves controlled the money supply and this is why it didn't work.

The economists focus on supply (neoclassical economics) or demand (Keynesian economics) until the balance of supply and demand gets out of step. The economy stagnates due to either insufficient supply (1970s stagflation) or insufficient demand (today's ultra low inflation).

Money needs to enter the economy to increase the supply of goods and services, while at the same time; the increased money supply enables the demand for those goods and services.

Banks and governments create money and this is now well understood outside the mainstream.

The banks have been creating money to lend into real estate and inflate financial asset prices. This is not what you want; they should be creating money to increase the supply of goods and services by lending into business and industry. Their lending hasn't been increasing GDP.

https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.53.09.png

It all started going wrong when with financial liberalisation and a 1979 policy decision. The UK eliminated corset controls on banking in 1979 and the banks invaded the mortgage market. This is the start of the real estate frenzy.

You can let bankers do what they want, but they have no idea how to grow the economy with bank credit.
Supply had outstripped demand by the 1920s in the US and they used bank credit to maintain demand, but this can never work in the longer term as this money needs to be paid back. Government created money has to fill the gap as it doesn't need to be paid back.

Governments can create money, jobs and wages in the public sector, building the infrastructure for the economy and looking after the health and education of the population to provide the economic framework necessary for the private sector who can't make a profit doing these things.

The magic number is GDP, we need to focus on what increasing that number means.

Our main problem is an ideological Left who think the answer always lies on the demand side and an ideological Right who always think the answer lies on the supply side.

The Left think Government is the answer and the Right think the private sector is the answer.

You need both, due to the increased productivity of the private sector that cannot create the necessary demand for those goods and services through private sector wages alone.

Sound of the Suburbs , May 27, 2018 at 6:01 am

Understanding money is critical and this is something central bankers monitor, but they don't appear to know what it means

The flow of funds within the economy.

This helps us understand why Government surpluses precede finical crises and why balanced budgets and Government surpluses push the private sector into debt

Richard Koo shows the graph central bankers use, the flow of funds within the economy, which sums to zero (32-34 mins.).

https://www.youtube.com/watch?v=8YTyJzmiHGk

Government assets + corporate assets + household assets + transfers from/to the rest of the world = zero
They can't all be positive.

The US runs a large trade deficit and this money needs to come from somewhere.

It is the Government that should run the big deficit to fund the other three and if you clamp down on government spending your economy can't grow unless it starts running on bank debt. The corporate sector and households have to get into debt to balance this zero sum equation.

A Government surplus requires an indebted private sector unless you are Germany and run a trade surplus.

This is the US (46.30 mins.)

https://www.youtube.com/watch?v=ba8XdDqZ-Jg

Clinton was proud of the Government surplus but he didn't realise that this meant the private sector had to go into debt. The last Government surplus occurred in 1927 – 1930, it precedes crises.

Richard Koo's video shows the Japanese Government ran a surplus just before the Japanese economy blew up.

Sound of the Suburbs , May 27, 2018 at 9:21 am

Neoclassical economics doesn't focus on GDP because it predates it. It was put together before they knew how to measure economic activity.

It lets the wealthy accumulate all the money until the economy falls over though a lack of demand.
Mariner Eccles, FED chair 1934 – 48, passes comment the last time they used neoclassical economics in the US in the 1920s.

"a giant suction pump had by 1929 to 1930 drawn into a few hands an increasing proportion of currently produced wealth. This served then as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied themselves the kind of effective demand for their products which would justify reinvestment of the capital accumulation in new plants. In consequence as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When the credit ran out, the game stopped"

This time it's global.

2014 – "85 richest people as wealthy as poorest half of the world"
2016 – "Richest 62 people as wealthy as half of world's population"
2017 – World's eight richest people have same wealth as poorest 50%

impermanence , May 27, 2018 at 12:44 pm

Lying, cheating, and stealing is what we human beings seem to do best, so when the pot becomes big enough, the elite [those willing to do whatever it takes] do what the elite have done, lie, cheat and steal with reckless abandon.

Those who choose to live a noble life must always be grounded by the notion that the reward for doing such is in achieving good night's sleep, and little more. You truly can not have your cake and eat it too, not then, not now, not ever

[May 18, 2018] For Economic Truth Turn To Michael Hudson by Paul Craig Roberts

Notable quotes:
"... Another defect of neoliberal economics is the doctrine's denial that resources are finite and their exhaustion a heavy cost not born by those who exploit the resources. Many local and regional civilizations have collapsed from exhaustion of the surrounding resources. Entire books have been written about this, but it is not part of neoliberal economics. Supplement study of Hudson with study of ecological economists such as Herman Daly. ..."
May 09, 2018 | www.paulcraigroberts.org

Readers ask me how they can learn economics, what books to read, what university economics departments to trust. I receive so many requests that it is impossible to reply individually. Here is my answer.

There is only one way to learn economics, and that is to read Michael Hudson's books. It is not an easy task. You will need a glossary of terms. In some of Hudson's books, if memory serves, he provides a glossary, and his recent book "J Is for Junk Economics" defines the classical economic terms that he uses. You will also need patience, because Hudson sometimes forgets in his explanations that the rest of us don't know what he knows.

The economics taught today is known as neoliberal. This economics differs fundamentally from classical economics that Hudson represents. For example, classical economics stresses taxing economic rent instead of labor and real investment, while neo-liberal economics does the opposite.

An economic rent is unearned income that accrues to an owner from an increase in value that he did nothing to produce. For example, a new road is built at public expense that opens land to development and raises its value, or a transportation system is constructed in a city that raises the value of nearby properties. These increases in values are economic rents. Classical economists would tax away the increase in values in order to pay for the road or transportation system.

Neoliberal economists redefined all income as earned. This enables the financial system to capitalize economic rents into mortgages that pay interest. The higher property values created by the road or transportation system boost the mortgage value of the properties. The financialization of the economy is the process of drawing income away from the purchases of goods and services into interest and fees to financial entities such as banks. Indebtedness and debt accumulate, drawing more income into their service until there is no purchasing power left to drive the economy.

For example, formerly in the US lenders would provide a home mortgage whose service required up to 25% of the family's monthly income. That left 75% of the family's income for other purchases. Today lenders will provide mortgages that eat up half of the monthly income in mortgage service, leaving only 50% of family income for other purchases. In other words, a financialized economy is one that diverts purchasing power away from productive enterprise into debt service.

Hudson shows that international trade and foreign debt also comprise a financialization process, only this time a country's entire resources are capitalized into a mortgage. The West sells a country a development plan and a loan to pay for it. When the debt cannot be serviced, the country is forced to impose austerity on the population by cutbacks in education, health care, public support systems, and government employment and also to privatize public assets such as mineral rights, land, water systems and ports in order to raise the capital with which to pay off the loan. Effectively, the country passes into foreign ownership. This now happens even to European Community members such as Greece and Portugal.

Another defect of neoliberal economics is the doctrine's denial that resources are finite and their exhaustion a heavy cost not born by those who exploit the resources. Many local and regional civilizations have collapsed from exhaustion of the surrounding resources. Entire books have been written about this, but it is not part of neoliberal economics. Supplement study of Hudson with study of ecological economists such as Herman Daly.

The neglect of external costs is a crippling failure of neoliberal economics. An external cost is a cost imposed on a party that does not share in the income from the activity that creates the cost. I recently wrote about the external costs of real estate speculators. https://www.paulcraigroberts.org/2018/04/26/capitalism-works-capitalists/ Fracking, mining, oil and gas exploration, pipelines, industries, manufacturing, waste disposal, and so on have heavy external costs associated with the activities.

Neoliberal economists treat external costs as a non-problem, because they theorize that the costs can be compensated, but they seldom are. Oil spills result in companies having to pay cleanup costs and compensation to those who suffered economically from the oil spill, but most external costs go unaddressed. If external costs had to be compensated, in many cases the costs would exceed the value of the projects. How, for example, do you compensate for a polluted river? If you think that is hard, how would the short-sighted destroyers of the Amazon rain forest go about compensating the rest of the world for the destruction of species and for the destructive climate changes that they are setting in motion? Herman Daly has pointed out that as Gross Domestic Product accounting does not take account of external costs and resource exhaustion, we have no idea if the value of output is greater than all of the costs associated with its production. The Soviet economy collapsed, because the value of outputs was less than the value of inputs.

Supply-side economics, with which I am associated, is not an alternative theory to neoliberal economics. Supply-side economics is a successful correction to neoliberal macroeconomic management. Keynesian demand management resulted in stagflation and worsening Phillips Curve trade-offs between employment and inflation. Supply-side economics cured stagflation by reversing the economic policy mix. I have told this story many times. You can find a concise explanation in my short book, "The Failure of Laissez Faire Capitalsim." This book also offers insights into other failures of neoliberal economics and for that reason would serve as a background introduction to Hudson's books.

I can make some suggestions, but the order in which you read Michael Hudson is up to you. "J is for Junk Economics" is a way to get information in short passages that will make you familiar with the terms of classical economic analysis. "Killing the Host" and "The Bubble and Beyond" will explain how an economy run to maximize debt is an economy that is self-destructing. "Super Imperialism" and "Trade, Development and Foreign Debt" will show you how dominant countries concentrate world economic power in their hands. "Debt and Economic Renewal in the Ancient Near East" is the story of how ancient economies dying from excessive debt renewed their lease on life via debt forgiveness.

Once you learn Hudson, you will know real economics, not the junk economics marketed by Nobel prize winners in economics, university economic departments, and Wall Street economists. Neoliberal economics is a shield for financialization, resource exhaustion, external costs, and capitalist exploitation.

Neoliberal economics is the world's reigning economics. Russia is suffering much more from neoliberal economics than from Washington's economic sanctions. China herself is overrun with US trained neoliberal economists whose policy advice is almost certain to put China on the same path to failure as all other neoliberal economies.

It is probably impossible to change anything for two main reasons. One is that so many greed-driven private economic activities are protected by neoliberal economics. So many exploitative institutions and laws are in place that to overturn them would require a more thorough revolution than Lenin's. The other is that economists have their entire human capital invested in neoliberal economics. There is scant chance that they are going to start over with study of the classical economists.

Neoliberal economics is an essential part of The Matrix, the false reality in which Americans and Europeans live. Neoliberal economics permits an endless number of economic lies. For example, the US is said to be in a long economic recovery that began in June 2009, but the labor force participation rate has fallen continuously throughout the period of alleged recovery. In previous recoveries the participation rate has risen as people enter the work force to take advantage of the new jobs.

In April the unemployment rate is claimed to have fallen to 3.9 percent, but the participation rate fell also. Neoliberal economists explain away the contradiction by claiming that the falling participation rate is due to the retirement of the baby boom generation, but BLS jobs statistics indicate that those 55 and older account for a large percentage of the new jobs during the alleged recovery. This is the age class of people forced into the part time jobs available by the absence of interest income on their retirement savings. What is really happening is that the unemployment rate does not include discouraged workers, who have given up searching for jobs as there are none to be found. The true measure of the unemployment rate is the decline in the labor force participation rate, not a 3.9 percent rate concocted by not counting those millions of Americans who cannot find jobs. If the unemployment rate really was 3.9 percent, there would be labor shortages and rising wages, but wages are stagnant. These anomalies pass without comment from neoliberal economists.

The long expansion since June 2009 might simply be a statistical artifact due to the under-measurement of inflation, which inflates the GDP figure. Inflation is under-estimated, because goods and services that rise in price are taken out of the index and less costly substitutes are put in their place and because price increases are explained away as quality improvements. In other words, statistical manipulation produces the favorable picture required by The Matrix.

Since the financial collapse caused by the repeal of Glass-Steagall and by financial deregulation, the Federal Reserve has robbed tens of millions of American savers by driving real interest rates down to zero for the sole purpose of saving the "banks too big to fail" that financial deregulation created. A handful of banks has been provided with free money -- in addition to the money that the Federal Reserve created in order to take the banks' bad derivative investments off their hands -- to put on deposit with the Fed from which to collect interest payments and with which to speculate and to drive up stock prices.

In other words, for a decade the economic policy of the United States has been run for the benefit of a few highly concentrated financial interests at the expense of the American people. The economic policy of the United States has been used to create economic rents for the mega-rich.

Neoliberal economists point out that during the 1950s the labor force participation rate was much lower than today and, thereby, they imply that the higher rates prior to the current "recovery" are an anomaly. Neoliberal economists have no historical knowledge as the past is of no interest to them. They do not even know the history of economic thought. Whether from ignorance or intentional deception, neoliberal economists ignore that the lower labor force participation rates of the 1950s reflect a time when married women were at home, not in the work force. In those halcyon days, one earner was all it took to sustain a family. I remember the days when the function of a married woman was to provide household services for the family.

But capitalists were not content to exploit only one member of a family. They wanted more, and by using economic policy to suppress pay while fomenting inflation, they drove married women into the work force, imposing huge external costs on the family, child-raising, relations between spouses, and on the children themselves. The divorce rate has exploded to 50 percent and single-parent households are common in America.

In effect, unleashed Capitalism has destroyed America. Privatization is now eating away Europe. Russia is on the same track as a result of its neoliberal brainwashing by American economists. China's love of success and money could doom this rising Asian giant as well if the government opens China to foreign finance capital and privatizes public assets that end up in foreign hands.

[Apr 24, 2018] How neoliberal economics in universities achieve tenure

They achieve it by serving the financial oligarchy...
Few things are as dangerous as economists with physics envy [aeon.co].
Notable quotes:
"... "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning. ..."
Apr 24, 2018 | www.nakedcapitalism.com

marku52 , April 20, 2018 at 3:57 pm

Stumbling and Mumbling has a good riff on this topic:
". Economics, for me, is not about armchair theorizing. It should begin with the facts, and especially the big ones. The facts are that share buy-backs do usually matter, so thought experiments that say otherwise are wrong from the off. Similarly, the fact that wage inflation has been low for years (pdf) is much more significant than any theorizing about Phillips curves."

The comments are good as well:
"That's a category error: you don't define "Economics", tenure committees define it, and they award tenure to people who have a long record of publishing "internally consistent" ("armchair theorizing") papers."
"I found myself sitting next to a very likable young middle-aged academic tenured at an elite British university, whom henceforth I will refer to as Doctor X and whose field is closely associated with this blog. Every year I publish papers in the top journals and they're pure shit." Doctor X, who by now had had a glass or two, felt bad about this, not least because "students these days are so idealistic and eager to learn; they're really wonderful." Furthermore Doctor X could and would like "to write serious papers but what would be the point?" "
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2018/04/facts-vs-hand-waving-in-economics.html#comments

hemeantwell , April 20, 2018 at 4:59 pm

Yeah. I'm inclined to think the author needs to curb his enthusiasms and take up dejected drinking.

The nub of his presentation was a model in which consumers, due to cognitive limitations, were unable to fully examine every single product they purchased. The result was that regulations guaranteeing a certain standard of safety, quality and the like could improve competition by giving people more time to shop around instead of having to devote so much time to investigate specific products. Thus, regulation would improve markets and competition

This is Nobel-level work? It amounts to finding a way to pitch a product to anti-regulation dogmatists. I'm sure that you could find similar arguments being made during the Progressive era regulatory push. Only they would have been framed more as "people will have more time to shop around if they're not killed by previous ingestion of the product."

Ape , April 22, 2018 at 3:32 am

Dude – they aren't actually doing fancy math. Linear regression – like it's 1850!

Most of their important proofs are irrelevant crap with wholes. The math is mostly undergraduate math! The emperor has no clothes!

The problem isn't just math trickery – it's not even proper ingenuity.

Just read a Summer or Krugman paper – it's 70 pages of words, 3 graphs of imaginary numbers and stats 2 equations. That's not mathematization.

Larry Motuz , April 22, 2018 at 4:34 pm

What I mean by 'mathemagics' is the misuse of mathematics –even simple mathematics -- to create the illusion that 'utility' or 'indifference curves' actually pertain to real concepts. In reality, they 'mathematize' gobbledygook passed off as coherent concepts. There is nothing so conceptually barren as 'utility' or 'indifference curve' analytics. The notion that one can derive any coherent 'demand' analysis for any one consumer that is individual human being (or life form of any kind) for any product, or that one can aggregate these up is mathematical junk.

Sound of the Suburbs , April 22, 2018 at 9:08 am

The Classical Economists used the broader political economy rather than today's narrow economics.

The Washington Consensus dreamed of a world run by the laws of economics.

The laws of economics worked in China's favour and the Western economies got hollowed out.

Disposable income = wages – (taxes + the cost of living)

Maximising profit required minimising wages.

The minimum wage is set when disposable income equals zero.

The minimum wage = taxes + the cost of living

China had it made and the West had tilted the playing field against itself.

The US eventually woke up the geopolitical consequences of a world governed by the laws of economics that had worked in China's favour.

Trump has just made things worse with his tax cuts.

Theory:
If we reduce taxes on the wealthy they will create more jobs and wages.

Reality:
If we reduce taxes on the wealthy they will create more jobs and wages in Asia where they can make more profit. They can then ship the stuff back here increasing Western trade deficits.

Sound of the Suburbs , April 22, 2018 at 9:09 am

"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning. " Warren Buffet, 25 May 2005

Did your class think about the geopolitics?
I don't think so.

Sound of the Suburbs , April 22, 2018 at 9:17 am

William White (BIS, OECD) is on board for the benefits of the broader political economy.

https://www.youtube.com/watch?v=g6iXBQ33pBo&t=2485s

[Apr 24, 2018] Constant and persistent nudging generally results in an angry backlash. Somewhere around when a person realizes "This is not where I wanted to be." That's now very true for neoclassic economy courses. Many students understand the game and hate it

Notable quotes:
"... cognitive infiltration ..."
Apr 24, 2018 | www.nakedcapitalism.com

Yves Smith, April 21, 2018 at 12:26 pm

Nudge was the title of a book by Richard Thaler and Cass Sunstein on how to manipulate people in their supposed best interest, like in cafeteria lines, to put whole fruit before desserts made with sugar.

See here for more detail:

blennylips , April 21, 2018 at 1:49 pm

If you liked Nudge , you'll love " cognitive infiltration ":

Conspiracy Theories
Harvard Public Law Working Paper No. 08-03

Because those who hold conspiracy theories typically suffer from a crippled epistemology, in accordance with which it is rational to hold such theories, the best response consists in cognitive infiltration of extremist groups. Various policy dilemmas, such as the question whether it is better for government to rebut conspiracy theories or to ignore them, are explored in this light.
Keywords: conspiracy theories, social networks, informational cascades, group polarization
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1084585

Is not this what discerning MIC's all do these days, via FBI FB?

Synoia , April 21, 2018 at 11:25 am

A nudge too far?

Constant and persistent nudging generally results in an angry backlash. Somewhere around when a person realizes "This is not where I wanted to be."

JTMcPhee , April 21, 2018 at 12:40 pm

And of course we mopes have been "nudged" into pretty much that blind serfdom alluded to. Back in the Cave, with not much chance of dispelling the belief in and subjection to the shadows projected on the wall we are forced to face

oaf , April 21, 2018 at 1:52 pm

manipulation is the sowing of a Karmic garden

Tom_Doak , April 21, 2018 at 6:09 pm

The classic nudge example is opting you into a 401(k) unless you opt out.

That's supposedly better for you but it is DEFINITELY better for the brokerage handling your account.

none , April 21, 2018 at 10:01 pm

I had to look it up: https://en.wikipedia.org/wiki/Nudge_theory

I hadn't heard of it before.

Tyronius , April 22, 2018 at 12:21 am

I rather detest the notion of someone or entity 'nudging' me in the direction of some behavior, especially in a paternalistic mode where the assumption is that they know better than I what I 'should' be doing or thinking.

On one level, isn't that a working definition of advertising? On another, it smacks of authoritarianism. Don't we have enough of this kind of thing already? Worse, what's the first reaction one naturally has when they realize they're being manipulated? Seems to be a strategy fraught with risk of getting exactly the wrong response.

If I'm to be encouraged to behave in a given way, show me the respect of offering a conscious, intelligent argument to do so on the merits, or kindly go (family blog) yourself!

Anti-Schmoo , April 23, 2018 at 4:18 am

In economics, the single most important thing to understand is debt.
If you understand debt; you won't have any debt.
Debt and freedom are the antithisis of each other.
Without debt; nudges have no influence.

Anti-Schmoo , April 23, 2018 at 4:24 am

A follow up:
https://www.esquire.com/lifestyle/money/a19181300/nassim-nicholas-taleb-money-advice/
A very frank discussion of debt and freedom.

[Apr 24, 2018] The term scientism generally points to the facile application of science in unwarranted situations not amenable to application of the scientific method.

Apr 24, 2018 | www.nakedcapitalism.com

skippy , April 21, 2018 at 10:28 pm

The term scientism generally points to the facile application of science in unwarranted situations not amenable to application of the scientific method.

Soddy's attempts at linking the physical world via a quasi scientific approach without doing a thorough heterodox examination of our species wrt monies is my point i.e.

"Being scientist/technologists, Fuller and Soddy felt the need to define wealth, to quantify it in an equation. They knew the components of wealth were physical resources – matter and energy – and the level of knowledge available to most effectively employ these resources. Simplistically stated:

WEALTH = (MATTER + ENERGY) x HUMAN KNOWLEDGE

Energy stored in fossil fuels – Earth's energy savings account – is, of course, unavailable after the fuels are burned. But both Fuller and Soddy understood that expanding human knowledge would eventually make it possible for humanity to operate on Earth's energy income using solar, wind, tidal, biofuels, etc. (but for lack of political will and resistance from the fossil fuel industry, we have reached this potential today). Additionally, the First Law of Thermodynamics says the total amount of matter and energy in the universe is constant and can be neither created nor destroyed, only interchanged. Since knowledge can only grow, wealth can only grow.

It is critical to understand that wealth is governed by the laws of physics and is incorruptible, whereas money is governed by the laws of man and is infinitely corruptible."

I could start with models and applications of theory between interdisciplinary modes of inquire – chalk and cheese. Was Soddy an accountant, deal with issues like sound finance vs functional, or have any depth wrt international systems – no. Worse bit in my book is it moralizes the money question without dealing with the broader social ethos and how that is forwarded via dominate ideology.

To that quandary I brought up atomistic individualism on this blog some time ago, Syll has recently mentioned it. Its in these things that proceed baked in human tool user problems like money.

drumlin woodchuckles , April 22, 2018 at 5:37 pm

Thank you skippy and the follow-on commenters for a serious genuine reply-to-and discussion-of my question.

It has been years since I read " Wealth, Virtual Wealth and Debt – – The Solution of the Economic Paradox". In light of this subthread I will have to dig it back out of my bookpile and read it again . . . and slower next time . . . to see what I end up thinking.

Why would I even bother to do that? Because it still seems to me that Soddy was at least trying to understand "economics" in terms of the biophysical world in which we all live and in which we do everything we do, including trying to understand "economics". He was at least trying to see how matter-and-energy harvesting in order to do thing-making and stuff-doing could actually be reality-based understood in terms of the best actual knowledge of matter-and-energy reality
existing in his day. If that fails to take account of all the cultural/psychomental/etc. things that humans will do within the picture frame of nature's biophysical constraints, that is a problem we will have to try taking account of in our own extremely troubled day.

But his scientism was at least an effort to ground "economic" understanding within real scientific knowledge. His scientism is still better than the cardboard replica scientism practiced by today's mainstream economists who are merely spray-painting a bunch of scientism onto the paper-mache' sewage-filled pig which is all that their mainstream discipline of mainstream economics ever even is.

Or ever even will be.

[Apr 16, 2018] The Incoherence of the Philosophers The Horror of Postmodernism by The Liberal Moonbat

Notable quotes:
"... The rundown is that a pseudo-intellectual retreat from rationalism invited its well-deserved ridicule too late, and may have been responsible for the needless and terrible demise of a great world civilization's halcyon era, for which the whole world suffers to this day. We need to learn from that. ..."
"... The Incoherence ..."
"... @Cassiodorus ..."
"... @The Liberal Moonbat ..."
"... @The Liberal Moonbat ..."
"... @Cassiodorus ..."
"... @The Liberal Moonbat ..."
"... @Cassiodorus ..."
"... it's really all just a game ..."
Apr 15, 2018 | caucus99percent.com

The Liberal Moonbat on Sun, 04/15/2018 - 7:20am

The title of this bit here refers to an 11th-Century work of Islamic theology, explained here: https://existentialcomics.com/comic/126

The rundown is that a pseudo-intellectual retreat from rationalism invited its well-deserved ridicule too late, and may have been responsible for the needless and terrible demise of a great world civilization's halcyon era, for which the whole world suffers to this day. We need to learn from that.

Everyone here needs to be aware of this, I'm afraid: The modern Western equivalent of The Incoherence . It explains so, so much. If you're wondering why you're suddenly being barraged with Orwellian jargon, charged with crimethink, seeing the issues you've been harping on for years suddenly turned against you as though you've never even heard of them, get aggressively assigned identities you've never had in your life and told that the person you've always been can't possibly exist, and that the consensus, however flawed and incomplete, of the past 50 years on many hard-fought issues is quite suddenly being treated as though it was all a nefarious lie (a la 9/11-flashback), here's the root of who and what to blame:

https://areomagazine.com/2017/03/27/how-french-intellectuals-ruined-the-...

The fact that institutions of higher learning have been coddling this for so long, despite the special treatment it could not survive without, and despite the fact that it bears the mantle and exploits the public clout of science, education, liberalism, and diversity, just to destroy all those things, is particularly shameful. They might as well allow Dianetics as a legitimate alternative to psychology.

Below is what I personally maintain is the Greatest Political Cartoon In American History. Though it refers to only one issue, it elegantly explains nearly everything wrong with American political thought.

arendt on Sun, 04/15/2018 - 9:29am
Good topic...

I'm going to post what I wrote ten years ago in a separate thread, giving you full credit for bringing up the subject.

Cassiodorus on Sun, 04/15/2018 - 1:31pm
That Helen Pluckrose piece is pretty funny.

Postmodernism presents a threat not only to liberal democracy but to modernity itself .

When in doubt, scream and shout, run around in circles, and panic! Uh-huh. Postmodernism was the solution to an academic problem which arose in the Eighties with the proliferation of Ph.D. and M.A. degrees in the humanities. Nobody wanted to read another thesis or dissertation on Shakespeare, and all of the academic work had to be strictly original and pass increasingly onerous originality tests of the type employed by turnitin.com . Meanwhile the authors had to write these damn things if they were to receive diplomas and move on to teaching jobs. Postmodernism to the rescue! Postmodernism as such was an aesthetic movement, revealing with drab uniformity the juxtaposition of everything in an era in which everything was a commodity. Postmodernism is the Hamburger Helper of the academic humanities, a solution to a purely practical matter.

But Pluckrose continues to panic. Here she is characterizing the postmodern perspective:

Therefore the author of a text is not the authority on its meaning.

So? Perhaps Pluckrose needs to read more undergraduate papers, in which their authors evoke an eternal authorial struggle. "Say what you mean!" my teacherly red ink continually shouts at these undergraduates. Of course this is a problem when one's undergraduates write run-on sentences or sentence fragments. But does anyone really say what they mean? I suppose we can at least try harder. Meanwhile original meanings get lost in the procession of history. A prima facie example of this is "originalism" in Constitutional jurisprudence, which claims ultimate reliance on an "original meaning" of the Constitution -- you know, that one and only one original meaning the Founders intended. Never mind that said Founders were walking contradictions. Take for instance Thomas Jefferson, that eloquent waxer upon the virtues of freedom. Now ask Sally Hemings about him.

Let's skip to Pluckrose's conclusion:

In order to regain credibility, the Left needs to recover a strong, coherent and reasonable liberalism.

I don't see why. How about if we figure out what sort of utopian dream would be appropriate for our world in our day and age, and then decide afterward if we want to call it "liberalism"? Isn't the point of the "science" which Pluckrose regards so highly to put the conclusion at the end of one's research, rather than at the beginning?

I could go on, but this is long enough for a comment in a diary.

The Liberal Moonbat on Sun, 04/15/2018 - 12:49pm
"Postmodernism" may not be the ideal term

@Cassiodorus

Postmodernism to the rescue! Postmodernism as such was an aesthetic movement, revealing with drab uniformity the juxtaposition of everything in an era in which everything was a commodity.

That's a different kind of "Postmodernism" altogether, the kind associated with (if I'm not mistaken) such Chaotic gems as MAD Magazine, Monty Python, The Far Side , and the vibrant, innovative weirdness of a wide array of 1990s art, literature, and pop culture. My very bones are built on such things.

There's also "postmodern architecture", best known for being boring (my mother has been known to call it "post-architecture").

This, though? This is something entirely anathema. The aesthetic we call "postmodern" is liberating and innovative (at least as long as it stays in the hands of people who "get it"); it teaches that there are no rules, that life is a strange and beautiful carnival, that we can be whatever we want to be, and the world can be whatever we want it to be.

"Postmodernism" as sociology, on the other hand, with its denial of the very existence of the individual, and obscene redefinitions of such sacred words as "Justice", is just all but explicitly totalitarian, and would have us believe that the entire 20th Century, with all its hard-fought, bitter-bought victories and miracles, was all for nothing.

Postmodernism presents a threat not only to liberal democracy but to modernity itself .

When in doubt, scream and shout, run around in circles, and panic! Uh-huh. Postmodernism was the solution to an academic problem which arose in the Eighties with the proliferation of Ph.D. and M.A. degrees in the humanities. Nobody wanted to read another thesis or dissertation on Shakespeare, and all of the academic work had to be strictly original and pass increasingly onerous originality tests of the type employed by turnitin.com . Meanwhile the authors had to write these damn things if they were to receive diplomas and move on to teaching jobs. Postmodernism to the rescue! Postmodernism as such was an aesthetic movement, revealing with drab uniformity the juxtaposition of everything in an era in which everything was a commodity. Postmodernism is the Hamburger Helper of the academic humanities, a solution to a purely practical matter.

But Pluckrose continues to panic. Here she is characterizing the postmodern perspective:

Therefore the author of a text is not the authority on its meaning.

So? Perhaps Pluckrose needs to read more undergraduate papers, in which their authors evoke an eternal authorial struggle. "Say what you mean!" my teacherly red ink continually shouts at these undergraduates. Of course this is a problem when one's undergraduates write run-on sentences or sentence fragments. But does anyone really say what they mean? I suppose we can at least try harder. Meanwhile original meanings get lost in the procession of history. A prima facie example of this is "originalism" in Constitutional jurisprudence, which claims ultimate reliance on an "original meaning" of the Constitution -- you know, that one and only one original meaning the Founders intended. Never mind that said Founders were walking contradictions. Take for instance Thomas Jefferson, that eloquent waxer upon the virtues of freedom. Now ask Sally Hemings about him.

Let's skip to Pluckrose's conclusion:

In order to regain credibility, the Left needs to recover a strong, coherent and reasonable liberalism.

I don't see why. How about if we figure out what sort of utopian dream would be appropriate for our world in our day and age, and then decide afterward if we want to call it "liberalism"? Isn't the point of the "science" which Pluckrose regards so highly to put the conclusion at the end of one's research, rather than at the beginning?

I could go on, but this is long enough for a comment in a diary.

Cassiodorus on Sun, 04/15/2018 - 6:26pm
Let me briefly suggest here --

@The Liberal Moonbat @The Liberal Moonbat that it is "liberalism" itself that has run out of gas.

At any rate, to deal with the objections to postmodernism: it's a performative contradiction to be an academic writing against the idea of the individual, for higher-level academia exists to adorn the resumes of self-proclaimed individuals. I just don't see postmodernism, of whatever kind you care to distinguish, as anything but harmless, useless, and pointless outside of its obvious role in contributing to the resume-building efforts of professors in the humanities, and I haven't seen anything here to change my mind about that.

Rather, the problem is that the liberals have run out of new mechanisms whereby the liberal utopia might bear fruit. The liberal trend peaked a long time ago. And, in the meantime, liberal objections to the neoliberal utopia, the utopia of total market existence for everyone as enforced by government diktat, have become toothless. In the US context the liberals appear either blind to or despairing of the fact that the best they had for politics was Barack Obama and Hillary Rodham Clinton, and that their hero Bernie Sanders nullified himself by endorsing Hillary Rodham Clinton. In the French contest the best they had was Macron. I suppose that there are a few islands of sanity elsewhere. But liberalism does not contribute substantially to the longevity of such islands.

#2

Postmodernism to the rescue! Postmodernism as such was an aesthetic movement, revealing with drab uniformity the juxtaposition of everything in an era in which everything was a commodity.

That's a different kind of "Postmodernism" altogether, the kind associated with (if I'm not mistaken) such Chaotic gems as MAD Magazine, Monty Python, The Far Side , and the vibrant, innovative weirdness of a wide array of 1990s art, literature, and pop culture. My very bones are built on such things.

There's also "postmodern architecture", best known for being boring (my mother has been known to call it "post-architecture").

This, though? This is something entirely anathema. The aesthetic we call "postmodern" is liberating and innovative (at least as long as it stays in the hands of people who "get it"); it teaches that there are no rules, that life is a strange and beautiful carnival, that we can be whatever we want to be, and the world can be whatever we want it to be. "Postmodernism" as sociology, on the other hand, with its denial of the very existence of the individual, and obscene redefinitions of such sacred words as "Justice", is just all but explicitly totalitarian, and would have us believe that the entire 20th Century, with all its hard-fought, bitter-bought victories and miracles, was all for nothing.

The Liberal Moonbat on Sun, 04/15/2018 - 4:42pm
That turns us to the definition of "liberalism", then

@Cassiodorus To me it just means...well, kind of just being a good, intelligent, and independent-minded person who learns from history and builds on it. If, as I've read the claim, "conservatism is the negation of ideology", I'd venture to describe liberalism as the absence of externally-derived ideology.

I don't think the establishment Democrats - spineless, capitalist, militarist, insular, and ultimately authoritarian - deserve to be let anywhere near the label "liberal".

#2.1 #2.1 that it is "liberalism" itself that has run out of gas.

At any rate, to deal with the objections to postmodernism: it's a performative contradiction to be an academic writing against the idea of the individual, for higher-level academia exists to adorn the resumes of self-proclaimed individuals. I just don't see postmodernism, of whatever kind you care to distinguish, as anything but harmless, useless, and pointless outside of its obvious role in contributing to the resume-building efforts of professors in the humanities, and I haven't seen anything here to change my mind about that.

Rather, the problem is that the liberals have run out of new mechanisms whereby the liberal utopia might bear fruit. The liberal trend peaked a long time ago. And, in the meantime, liberal objections to the neoliberal utopia, the utopia of total market existence for everyone as enforced by government diktat, have become toothless. In the US context the liberals appear either blind to or despairing of the fact that the best they had for politics was Barack Obama and Hillary Rodham Clinton, and that their hero Bernie Sanders nullified himself by endorsing Hillary Rodham Clinton. In the French contest the best they had was Macron. I suppose that there are a few islands of sanity elsewhere. But liberalism does not contribute substantially to the longevity of such islands.

Cassiodorus on Sun, 04/15/2018 - 6:57pm
Well the postcapitalists

@The Liberal Moonbat are "good, intelligent, and independent-minded" people who "learn from history and build on it." The difference, of course, is that the postcapitalists want to jettison capitalism whereas most of the liberals want to "build on it." "A well-regulated capitalism," they tell us, is the way to go, because history declares "Communism" anathema. Now perhaps not all liberals agree with this well-recited dogma, but its primary problem is that it does not touch capitalism's commodification of everything including governments. Thus liberals who believe in this dogma claim that they seek the best-possible accommodation with capitalism, and "well-regulated" means "regulated enough to look good." Politicians with the endorsement of liberals must keep the air and water clean in areas where the residents are rich enough to buy politicians.

Now of course the liberals will protest this characterization of them, proclaiming once again that they are "good, intelligent, and independent-minded." But where can they be seen imagining the world after capitalism? Kim Stanley Robinson at least tries:

https://player.vimeo.com/video/164911428?title=0&byline=0&portrait=0

Kim Stanley Robinson, Keynote from Environmental Humanities Center on Vimeo .

#2.1.1 To me it just means...well, kind of just being a good, intelligent, and independent-minded person who learns from history and builds on it. If, as I've read the claim, "conservatism is the negation of ideology", I'd venture to describe liberalism as the absence of externally-derived ideology.

I don't think the establishment Democrats - spineless, capitalist, militarist, insular, and ultimately authoritarian - deserve to be let anywhere near the label "liberal".

The Liberal Moonbat on Mon, 04/16/2018 - 11:41am
Having formally studied economics...

@Cassiodorus I've come away with the conclusion that the very concept is, at best, nothing more than a kind of subtopic of history, and at worst, outright pseudoscience, if not religion. My attitude has since spread to much of the rest of that which bills itself as "social science" - sociology's one thing, of course, and so is modern psychology, having dumped Freud, but I think the notion of "social science" is finally revealing itself to mostly be just another disastrous 19th-Century conceit. Free will is kryptonite to science. "The economy", "society", "culture", people labor under these things because they believe they're unavoidably real, but it's really all just a game , and the rules can be almost whatever we want them to be.

You can try to make anything into a "science" - but not everything can or should. Case in point: After World War II, the Soviet Union decided that military strategy and tactics were a science, and that it had natural laws or whatever that could be honed to the same degree of precision as the laws of physics; with time, they believed, they'd be able to predict the outcome of a battle before a single shot had been fired. This "science" crashed and burned when they invaded Afghanistan.

As to the question of "what do we replace capitalism with?", my honest answer is: Nothing. Stop believing in "economics", and just do what makes sense based on situational necessity and a long-term vision of what we want. A "mixed economy" like those of Norway, 1970s Britain, or (arguably) New Deal America is really just an economy that has broken free of the religion of "economics," and plays by its own, common sense/common morality rules. The best economic policy MO I've ever heard of is Finland's: "Let's do what makes our people HAPPY!" (I read a dandy article about that a while back, but I can't seem to find it now).

#2.1.1.1 are "good, intelligent, and independent-minded" people who "learn from history and build on it." The difference, of course, is that the postcapitalists want to jettison capitalism whereas most of the liberals want to "build on it." "A well-regulated capitalism," they tell us, is the way to go, because history declares "Communism" anathema. Now perhaps not all liberals agree with this well-recited dogma, but its primary problem is that it does not touch capitalism's commodification of everything including governments. Thus liberals who believe in this dogma claim that they seek the best-possible accommodation with capitalism, and "well-regulated" means "regulated enough to look good." Politicians with the endorsement of liberals must keep the air and water clean in areas where the residents are rich enough to buy politicians.

Now of course the liberals will protest this characterization of them, proclaiming once again that they are "good, intelligent, and independent-minded." But where can they be seen imagining the world after capitalism? Kim Stanley Robinson at least tries:

https://player.vimeo.com/video/164911428?title=0&byline=0&portrait=0

Kim Stanley Robinson, Keynote from Environmental Humanities Center on Vimeo .

on the cusp on Sun, 04/15/2018 - 11:32am
I recently visited UAE.

I enjoyed a museum visit in Sharza, where one section of the complex had displays of incredible scientific contributions I had never associated with this part of the world.

When I left that section, everything became examples and displays of Islam. Korans, proper clothing, a few weapons. Thinking back, the science section pre-dated this philosopher. I saw his influence, just didn't know it until today.

Very interesting essay.

Azazello on Sun, 04/15/2018 - 2:21pm
Former philosophy major here.

I never could understand Postmodernism. Is this because I am a white male or because I find Enlightenment concepts more coherent and more useful in my everyday life and politics ? Whatever, I remain happily stuck in the late 18th century. Good to see a mention of Alan Sokal in the linked article.

MrWebster on Mon, 04/16/2018 - 12:05pm
What I remember about Shakespeare in college

And other literature courses was that the classes were about the schools of literary criticism on Shakespeare, rather than about the students doing a close reading of Shakespeare. And then of course, critiques on the schools of literary criticism.

[Apr 16, 2018] >The Incoherence of the Philosophers The Horror of Postmodernism

Apr 16, 2018 | caucus99percent.com

The Liberal Moonbat on Sun, 04/15/2018 - 7:20am

[Apr 04, 2018] Elite universities are selling themselves – and look who s buying by Grif Peterson and Yarden Katz

Notable quotes:
"... Bin Salman's affair with academia isn't a fluke – it's a result of the neoliberal logic by which universities increasingly operate. As the journalist David Dickson noted in 1984, American universities and corporations have "teamed up to challenge the democratic control of knowledge" by delegating control over academic research to "the marketplace". ..."
Mar 30, 2018 | www.theguardian.com

Bin Salman's affair with academia isn't a fluke – it's a result of the neoliberal logic by which universities increasingly operate. As the journalist David Dickson noted in 1984, American universities and corporations have "teamed up to challenge the democratic control of knowledge" by delegating control over academic research to "the marketplace".

This market rationality extends even to the way research is evaluated – which the Saudi government has been gaming. To give one example, it paid highly cited mathematicians at universities around the world to list King Abdulaziz University as an affiliation, thereby making it the seventh "best" mathematics department worldwide in the 2014 US News and World Report university rankings .

Here, the Saudi government is only playing by the rules of a game designed by western elites. This is the same logic that has been used to allow corporations, nonprofits and the military to steadily buy out chunks of academia to the point where it makes little sense to presume clear boundaries exist between these entities. As a result, numerous partnerships entangle MIT researchers with Bin Salman. On his Boston tour, he also visited IBM's Cambridge research facility, which recently partnered with MIT to form an artificial intelligence research laboratory in exchange for a $240m commitment to the university. Boston Dynamics , an MIT partner that builds robots for the US military, also offered a demonstration. Such alliances ought to cast doubt on MIT's promise to understand the "societal and ethical" implications of AI and build socially beneficial technologies.

The terms of all of these partnerships are essentially opaque, while the secrecy that surrounds them denies the community the chance to deliberate and take action. The growth of unaccountable university partnerships, like other crises facing educational institutions, stems from the absence of democratic engagement. When universities decide to sell themselves to the highest bidder, they become deaf to the interests of their students and the wider societies in which they operate. Subservience to war criminals and corporate overlords tends to follow.

[Apr 04, 2018] Elite universities are selling themselves and look who's buying

Apr 04, 2018 | www.theguardian.com

Bin Salman's affair with academia isn't a fluke – it's a result of the neoliberal logic by which universities increasingly operate. As the journalist David Dickson noted in 1984, American universities and corporations have "teamed up to challenge the democratic control of knowledge" by delegating control over academic research to "the marketplace".

This market rationality extends even to the way research is evaluated – which the Saudi government has been gaming. To give one example, it paid highly cited mathematicians at universities around the world to list King Abdulaziz University as an affiliation, thereby making it the seventh "best" mathematics department worldwide in the 2014 US News and World Report university rankings .

Here, the Saudi government is only playing by the rules of a game designed by western elites. This is the same logic that has been used to allow corporations, nonprofits and the military to steadily buy out chunks of academia to the point where it makes little sense to presume clear boundaries exist between these entities. As a result, numerous partnerships entangle MIT researchers with Bin Salman. On his Boston tour, he also visited IBM's Cambridge research facility, which recently partnered with MIT to form an artificial intelligence research laboratory in exchange for a $240m commitment to the university. Boston Dynamics , an MIT partner that builds robots for the US military, also offered a demonstration. Such alliances ought to cast doubt on MIT's promise to understand the "societal and ethical" implications of AI and build socially beneficial technologies.

The terms of all of these partnerships are essentially opaque, while the secrecy that surrounds them denies the community the chance to deliberate and take action. The growth of unaccountable university partnerships, like other crises facing educational institutions, stems from the absence of democratic engagement. When universities decide to sell themselves to the highest bidder, they become deaf to the interests of their students and the wider societies in which they operate. Subservience to war criminals and corporate overlords tends to follow.

[Mar 25, 2018] Surveillance is the DNA of the Platform Economy

Creating a malware application which masks itself as some kind of pseudo scientific test and serves as the backdoor to your personal data is a very dirty trick...
Especially dirty it it used by academic researchers, who in reality are academic scum... An additional type of academic gangsters, in addition to Harvard Mafia
Notable quotes:
"... By Ivan Manokha, a departmental lecturer in the Oxford Department of International Development. He is currently working on power and obedience in the late-modern political economy, particularly in the context of the development of new technologies of surveillance. Originally published at openDemocracy ..."
"... The current social mobilization against Facebook resembles the actions of activists who, in opposition to neoliberal globalization, smash a McDonald's window during a demonstration. ..."
"... But as Christopher Wylie, a twenty-eight-year-old Canadian coder and data scientist and a former employee of Cambridge Analytica, stated in a video interview , the app could also collect all kinds of personal data from users, such as the content that they consulted, the information that they liked, and even the messages that they posted. ..."
"... All this is done in order to use data to create value in some way another (to monetize it by selling to advertisers or other firms, to increase sales, or to increase productivity). Data has become 'the new oil' of global economy, a new commodity to be bought and sold at a massive scale, and with this development, as a former Harvard Business School professor Shoshana Zuboff has argued , global capitalism has become 'surveillance capitalism'. ..."
"... What this means is that platform economy is a model of value creation which is completely dependant on continuous privacy invasions and, what is alarming is that we are gradually becoming used to this. ..."
"... In other instances, as in the case of Kogan's app, the extent of the data collected exceeds what was stated in the agreement. ..."
"... What we need is a total redefinition of the right to privacy (which was codified as a universal human right in 1948, long before the Internet), to guarantee its respect, both offline and online. ..."
"... I saw this video back in 2007. It was originally put together by a Sarah Lawrence student who was working on her paper on social media. The ties of all the original investors to IN-Q-Tel scared me off and I decided to stay away from Facebook. ..."
"... But it isn't just FB. Amazon, Twitter, Google, LinkedIn, Apple, Microsoft and many others do the same, and we are all caught up in it whether we agree to participate or not. ..."
"... Platform Capitalism is a mild description, it is manipulation based on Surveillance Capitalism, pure and simple. The Macro pattern of Corporate Power subsuming the State across every area is fascinating to watch, but a little scary. ..."
"... For his part, Aleksandr Kogan established a company, Global Science Research, that contracted with SCL, using Facebook data to map personality traits for its work in elections (Kosinski claims that Kogan essentially reverse-engineered the app that he and Stillwell had developed). Kogan's app harvested data on Facebook users who agreed to take a personality test for the purposes of academic research (though it was, in fact, to be used by SCL for non-academic ends). But according to Wylie, the app also collected data on their entire -- and nonconsenting -- network of friends. Once Cambridge Analytica and SCL had won contracts with the State Department and were pitching to the Pentagon, Wylie became alarmed that this illegally-obtained data had ended up at the heart of government, along with the contractors who might abuse it. ..."
"... This apparently bizarre intersection of research on topics like love and kindness with defense and intelligence interests is not, in fact, particularly unusual. It is typical of the kind of dual-use research that has shaped the field of social psychology in the US since World War II. ..."
"... Much of the classic, foundational research on personality, conformity, obedience, group polarization, and other such determinants of social dynamics -- while ostensibly civilian -- was funded during the cold war by the military and the CIA. ..."
"... The pioneering figures from this era -- for example, Gordon Allport on personality and Solomon Asch on belief conformity -- are still cited in NATO psy-ops literature to this day ..."
"... This is an issue which has frustrated me greatly. In spite of the fact that the country's leading psychologist (at the very least one of them -- ex-APA president Seligman) has been documented taking consulting fees from Guantanamo and Black Sites goon squads, my social science pals refuse to recognize any corruption at the core of their so-called replicated quantitative research. ..."
Mar 24, 2018 | www.nakedcapitalism.com
Yves here. Not new to anyone who has been paying attention, but a useful recap with some good observations at the end, despite deploying the cringe-making trope of businesses having DNA. That legitimates the notion that corporations are people.

By Ivan Manokha, a departmental lecturer in the Oxford Department of International Development. He is currently working on power and obedience in the late-modern political economy, particularly in the context of the development of new technologies of surveillance. Originally published at openDemocracy

The current social mobilization against Facebook resembles the actions of activists who, in opposition to neoliberal globalization, smash a McDonald's window during a demonstration.

On March 17, The Observer of London and The New York Times announced that Cambridge Analytica, the London-based political and corporate consulting group, had harvested private data from the Facebook profiles of more than 50 million users without their consent. The data was collected through a Facebook-based quiz app called thisisyourdigitallife, created by Aleksandr Kogan, a University of Cambridge psychologist who had requested and gained access to information from 270,000 Facebook members after they had agreed to use the app to undergo a personality test, for which they were paid through Kogan's company, Global Science Research.

But as Christopher Wylie, a twenty-eight-year-old Canadian coder and data scientist and a former employee of Cambridge Analytica, stated in a video interview , the app could also collect all kinds of personal data from users, such as the content that they consulted, the information that they liked, and even the messages that they posted.

In addition, the app provided access to information on the profiles of the friends of each of those users who agreed to take the test, which enabled the collection of data from more than 50 million.

All this data was then shared by Kogan with Cambridge Analytica, which was working with Donald Trump's election team and which allegedly used this data to target US voters with personalised political messages during the presidential campaign. As Wylie, told The Observer, "we built models to exploit what we knew about them and target their inner demons."

'Unacceptable Violation'

Following these revelations the Internet has been engulfed in outrage and government officials have been quick to react. On March 19, Antonio Tajani President of the European Parliament Antonio Tajani, stated in a twitter message that misuse of Facebook user data "is an unacceptable violation of our citizens' privacy rights" and promised an EU investigation. On March 22, Wylie communicated in a tweet that he accepted an invitation to testify before the US House Intelligence Committee, the US House Judiciary Committee and UK Parliament Digital Committee. On the same day Israel's Justice Ministry informed Facebook that it was opening an investigation into possible violations of Israelis' personal information by Facebook.

While such widespread condemnation of Facebook and Cambridge Analytica is totally justified, what remains largely absent from the discussion are broader questions about the role of data collection, processing and monetization that have become central in the current phase of capitalism, which may be described as 'platform capitalism', as suggested by the Canadian writer and academic Nick Srnicek in his recent book .

Over the last decade the growth of platforms has been spectacular: today, the top 4 enterprises in Forbes's list of most valuable brands are platforms, as are eleven of the top twenty. Most recent IPOs and acquisitions have involved platforms, as have most of the major successful startups. The list includes Apple, Google, Microsoft, Facebook, Twitter, Amazon, eBay, Instagram, YouTube, Twitch, Snapchat, WhatsApp, Waze, Uber, Lyft, Handy, Airbnb, Pinterest, Square, Social Finance, Kickstarter, etc. Although most platforms are US-based, they are a really global phenomenon and in fact are now playing an even more important role in developing countries which did not have developed commercial infrastructures at the time of the rise of the Internet and seized the opportunity that it presented to structure their industries around it. Thus, in China, for example, many of the most valuable enterprises are platforms such as Tencent (owner of the WeChat and QQ messaging platforms) and Baidu (China's search engine); Alibaba controls 80 percent of China's e-commerce market through its Taobao and Tmall platforms, with its Alipay platform being the largest payments platform in China.

The importance of platforms is also attested by the range of sectors in which they are now dominant and the number of users (often numbered in millions and, in some cases, even billions) regularly connecting to their various cloud-based services. Thus, to name the key industries, platforms are now central in Internet search (Google, Yahoo, Bing); social networking (Facebook, LinkedIn, Instagram, Snapchat); Internet auctions and retail (eBay, Taobao, Amazon, Alibaba); on-line financial and human resource functions (Workday, Upwork, Elance, TaskRabbit), urban transportation (Uber, Lyft, Zipcar, BlaBlaCar), tourism (Kayak, Trivago, Airbnb), mobile payment (Square Order, PayPal, Apple Pay, Google Wallet); and software development (Apple's App Store, Google Play Store, Windows App store). Platform-based solutions are also currently being adopted in more traditional sectors, such as industrial production (GE, Siemens), agriculture (John Deere, Monsanto) and even clean energy (Sungevity, SolarCity, EnerNOC).

User Profiling -- Good-Bye to Privacy

These platforms differ significantly in terms of the services that they offer: some, like eBay or Taobao simply allow exchange of products between buyers and sellers; others, like Uber or TaskRabbit, allow independent service providers to find customers; yet others, like Apple or Google allow developers to create and market apps.

However, what is common to all these platforms is the central role played by data, and not just continuous data collection, but its ever more refined analysis in order to create detailed user profiles and rankings in order to better match customers and suppliers or increase efficiency.

All this is done in order to use data to create value in some way another (to monetize it by selling to advertisers or other firms, to increase sales, or to increase productivity). Data has become 'the new oil' of global economy, a new commodity to be bought and sold at a massive scale, and with this development, as a former Harvard Business School professor Shoshana Zuboff has argued , global capitalism has become 'surveillance capitalism'.

What this means is that platform economy is a model of value creation which is completely dependant on continuous privacy invasions and, what is alarming is that we are gradually becoming used to this.

Most of the time platform providers keep track of our purchases, travels, interest, likes, etc. and use this data for targeted advertising to which we have become accustomed. We are equally not that surprised when we find out that, for example, robotic vacuum cleaners collect data about types of furniture that we have and share it with the likes of Amazon so that they can send us advertisements for pieces of furniture that we do not yet possess.

There is little public outcry when we discover that Google's ads are racially biased as, for instance, a Harvard professor Latanya Sweeney found by accident performing a search. We are equally hardly astonished that companies such as Lenddo buy access to people's social media and browsing history in exchange for a credit score. And, at least in the US, people are becoming accustomed to the use of algorithms, developed by private contractors, by the justice system to take decisions on sentencing, which often result in equally unfair and racially biased decisions .

The outrage provoked by the Cambridge Analytica is targeting only the tip of the iceberg. The problem is infinitely larger as there are countless equally significant instances of privacy invasions and data collection performed by corporations, but they have become normalized and do not lead to much public outcry.

DNA

Today surveillance is the DNA of the platform economy; its model is simply based on the possibility of continuous privacy invasions using whatever means possible. In most cases users agree, by signing the terms and conditions of service providers, so that their data may be collected, analyzed and even shared with third parties (although it is hardly possible to see this as express consent given the size and complexity of these agreements -- for instance, it took 8 hours and 59 minutes for an actor hired by the consumer group Choice to read Amazon Kindle's terms and conditions). In other instances, as in the case of Kogan's app, the extent of the data collected exceeds what was stated in the agreement.

But what is important is to understand that to prevent such scandals in the future it is not enough to force Facebook to better monitor the use of users' data in order to prevent such leaks as in the case of Cambridge Analytica. The current social mobilization against Facebook resembles the actions of activists who, in opposition to neoliberal globalization, smash a McDonald's window during a demonstration.

What we need is a total redefinition of the right to privacy (which was codified as a universal human right in 1948, long before the Internet), to guarantee its respect, both offline and online.

What we need is a body of international law that will provide regulations and oversight for the collection and use of data.

What is required is an explicit and concise formulation of terms and conditions which, in a few sentences, will specify how users' data will be used.

It is important to seize the opportunity presented by the Cambridge Analytica scandal to push for these more fundamental changes.



Arizona Slim , , March 24, 2018 at 7:38 am

I am grateful for my spidey sense. Thanks, spidey sense, for ringing the alarm bells whenever I saw one of those personality tests on Facebook. I never took one.

Steve H. , , March 24, 2018 at 8:05 am

First they came for

The most efficient strategy is to be non-viable . They may come for you eventually, but someone else gets to be the canary, and you haven't wasted energy in the meantime. TOR users didn't get that figured out.

Annieb , , March 24, 2018 at 2:02 pm

Never took the personality test either, but now I now that all of my friends who did unknowingly gave up my personal information too. I read an article somewhere about this over a year ago so it's really old news. Sent the link to a few people who didn't care. But now that they all know that Cambridge Analytical used FB data in support of the Trump campaign it's all over the mainstream and people are upset.

ChrisPacific , , March 25, 2018 at 4:07 pm

You can disable that (i.e., prevent friends from sharing your info with third parties) in the privacy options. But the controls are not easy to find and everything is enabled by default.

HotFlash , , March 24, 2018 at 3:13 pm

I haven't FB'd in years and certainly never took any such test, but if any of my friends, real or FB, did, and my info was shared, can I sue? If not, why not?

Octopii , , March 24, 2018 at 8:06 am

Everyone thought I was paranoid as I discouraged them from moving backups to the cloud, using trackers, signing up for grocery store clubs, using real names and addresses for online anything, etc. They thought I was overreacting when I said we need European-style privacy laws in this country. People at work thought my questions about privacy for our new location-based IoT plans were not team-based thinking.

And it turns out after all this that they still think I'm extreme. I guess it will have to get worse.

Samuel Conner , , March 24, 2018 at 8:16 am

In a first for me, there are surface-mount resistors in the advert at the top of today's NC links page. That is way out of the ordinary; what I usually see are books or bicycle parts; things I have recently purchased or searched.

But a couple of days ago I had a SKYPE conversation with a sibling about a PC I was scavenging for parts, and surface mount resistors (unscavengable) came up. I suspect I have been observed without my consent and am not too happy about it. As marketing, it's a bust; in the conversation I explicitly expressed no interest in such components as I can't install them. I suppose I should be glad for this indication of something I wasn't aware was happening.

Collins , , March 24, 2018 at 9:14 am

Had you used your computer keyboard previously to search for 'surface mount resistors', or was the trail linking you & resistors entirely verbal?

Samuel Conner , , March 24, 2018 at 10:15 am

No keyboard search. I never so much as think about surface mount components; the inquiry was raised by my sibling and I responded. Maybe its coincidental, but it seems quite odd.

I decided to click through to the site to generate a few pennies for NC and at least feel like I was punishing someone for snooping on me.

Abi , , March 25, 2018 at 3:24 pm

Its been happening to me a lot recently on my Instagram, I don't like pictures or anything, but whenever I have a conversation with someone on my phone, I start seeing ads of what I spoke about

ChiGal in Carolina , , March 25, 2018 at 10:12 am

I thought it came out a while ago that Skype captures and retains all the dialogue and video of convos using it.

Eureka Springs , , March 24, 2018 at 8:44 am

What we need is a total redefinition of the right to privacy (which was codified as a universal human right in 1948, long before the Internet), to guarantee its respect, both offline and online.

Are we, readers of this post, or citizens of the USA supposed to think there is anything binding in declarations? Or anything from the UN if at all inconvenient for that matter?

https://www.un.org/en/universal-declaration-human-rights/
Article 12.

No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks.

Platforms like facebook allow individuals to 'spy' on each other and people love it. When I was a kid i always marveled at how some households would leave a police scanner on 24/7. With the net we have this writ large with baby, puppy and tv dinner photos. Not to forget it's a narcissist paradise. I have friends who I've tried to gently over time inject tidbits of info like this article provides for many years and they still just refuse to try and get it. If they looked over their shoulder and saw how many people/entities are literally following them everywhere they go, they would become rabid gun owners (don't tread on me!) overnight, but the invisible hand/eye registers not at all.

Pelham , , March 24, 2018 at 9:13 am

A side note: If Facebook and other social media were to assume ANY degree of responsibility for content appearing on their platforms, they would be acknowledging their legal liability for ALL content.

Hence they would be legally responsible just as newspapers are. And major newspapers have on-staff lawyers and editors exquisitely attuned to the possibility of libelous content so they can avoid ruinous lawsuits.

If the law were applied as it should be, Facebook and its brethren wouldn't last five minutes before being sued into oblivion.

albert , , March 24, 2018 at 6:27 pm

" being sued into oblivion ." If only.

Non-liability is a product of the computer age. I remember having to agree with Microsofts policy to absolve them of -any- liability when using their software. If they had their druthers, -no- company would be liable for -anything-. It's called a 'perfect world'.

Companies that host 'social media' should not have to bear any responsibility for their users content. Newspapers employ writers and fact checkers. They are set up to monitor their staff for accuracy (Okay, in theory). So you can sue them and even their journalist employees. Being liable (and not sued) allows them to brag about how truthful they are. Reputations are a valuable commodity these days.

In the case of 'social media' providers, liability falls on the authors of their own comments, which is only fair, in my view. However, I would argue that those 'providers' should -not- be considered 'media' like newspapers, and their members should not be considered 'journalists'.

Also, those providers are private companies, and are free to edit, censor, or delete anything on their site. And of course it's automated. Some conservative Facebook members were complaining about being banned. Apparently, there a certain things you can't say on Facebook.

AFAIC, the bottom line is this: Many folks tend to believe everything they read online. They need to learn the skill of critical thinking. And realize that the Internet can be a vast wasteland; a digital garbage dump.

Why are our leaders so concerned with election meddling? Isn't our propaganda better than the Russians? We certainly pay a lot for it.
. .. . .. -- .

PlutoniumKun , , March 24, 2018 at 9:52 am

It seems even Elon Musk is now rebelling against Facebook.

Musk Takes Down the Tesla and SpaceX Facebook Pages.

Today, Musk also made fun of Sonos for not being as committed as he was to the anti-Facebook cause after the connected-speaker maker said it would pull ads from the platform -- but only for a week.

"Wow, a whole week. Risky " Musk tweeted.

saurabh , , March 24, 2018 at 11:43 am

Musk, like Trump, knows he does not need to advertise because a fawning press will dutifully report on everything he does and says, no matter how dumb.

Jim Thomson , , March 25, 2018 at 9:39 am

This is rich.

I can't resist: It takes a con to know a con.
(not the most insightful comment)

Daniel Mongan , , March 24, 2018 at 10:14 am

A thoughtful post, thanks for that. May I recommend you take a look at "All You Can Pay" (NationBooks 2015) for a more thorough treatment of the subject, together with a proposal on how to re-balance the equation. Full disclosure, I am a co-author.

JimTan , , March 24, 2018 at 11:12 am

People are starting to download copies of their Facebook data to get an understanding of how much information is being collected from them.

JCC , , March 24, 2018 at 11:29 am

A reminder: https://www.youtube.com/watch?v=iRT9On7qie8

I saw this video back in 2007. It was originally put together by a Sarah Lawrence student who was working on her paper on social media. The ties of all the original investors to IN-Q-Tel scared me off and I decided to stay away from Facebook.

But it isn't just FB. Amazon, Twitter, Google, LinkedIn, Apple, Microsoft and many others do the same, and we are all caught up in it whether we agree to participate or not.

Anyone watch the NCAA Finals and see all the ads from Google about being "The Official Cloud of the NCAA"? They were flat out bragging, more or less, about surveillance of players. for the NCAA.

Platform Capitalism is a mild description, it is manipulation based on Surveillance Capitalism, pure and simple. The Macro pattern of Corporate Power subsuming the State across every area is fascinating to watch, but a little scary.

oh , , March 24, 2018 at 1:44 pm

Caveat Emptor: If you watch YouTube, they'll only add to the information that they already have on you!

HotFlash , , March 24, 2018 at 3:27 pm

Just substitute "hook" for 'you" in the URL, you get the same video, no ads, and they claim not to track you. YMMV

Craig H. , , March 24, 2018 at 12:21 pm

Privacy no longer a social norm, says Facebook founder; Guardian; 10 January 2010

The Right to Privacy; Warren & Brandeis; Harvard Law Review; 15 December 1890

It was amusing that the top Google hit for the Brandeis article was JSTOR which requires us to surrender personal detail to access their site. To hell with that.

The part I like about the Brandeis privacy story is the motivation was some Manhattan rich dicks thought the gossip writers snooping around their wedding party should mind their own business. (Apparently whether this is actually true or just some story made up by somebody being catty at Brandeis has been the topic of gigabytes of internet flame wars but I can't ever recall seeing any of those.)

Ed , , March 24, 2018 at 2:50 pm

https://www.zerohedge.com/news/2018-03-23/digital-military-industrial-complex-exposed

" Two young psychologists are central to the Cambridge Analytica story. One is Michal Kosinski, who devised an app with a Cambridge University colleague, David Stillwell, that measures personality traits by analyzing Facebook "likes." It was then used in collaboration with the World Well-Being Project, a group at the University of Pennsylvania's Positive Psychology Center that specializes in the use of big data to measure health and happiness in order to improve well-being. The other is Aleksandr Kogan, who also works in the field of positive psychology and has written papers on happiness, kindness, and love (according to his résumé, an early paper was called "Down the Rabbit Hole: A Unified Theory of Love"). He ran the Prosociality and Well-being Laboratory, under the auspices of Cambridge University's Well-Being Institute.

Despite its prominence in research on well-being, Kosinski's work, Cadwalladr points out, drew a great deal of interest from British and American intelligence agencies and defense contractors, including overtures from the private company running an intelligence project nicknamed "Operation KitKat" because a correlation had been found between anti-Israeli sentiments and liking Nikes and KitKats. Several of Kosinski's co-authored papers list the US government's Defense Advanced Research Projects Agency, or DARPA, as a funding source. His résumé boasts of meetings with senior figures at two of the world's largest defense contractors, Boeing and Microsoft, both companies that have sponsored his research. He ran a workshop on digital footprints and psychological assessment for the Singaporean Ministry of Defense.

For his part, Aleksandr Kogan established a company, Global Science Research, that contracted with SCL, using Facebook data to map personality traits for its work in elections (Kosinski claims that Kogan essentially reverse-engineered the app that he and Stillwell had developed). Kogan's app harvested data on Facebook users who agreed to take a personality test for the purposes of academic research (though it was, in fact, to be used by SCL for non-academic ends). But according to Wylie, the app also collected data on their entire -- and nonconsenting -- network of friends. Once Cambridge Analytica and SCL had won contracts with the State Department and were pitching to the Pentagon, Wylie became alarmed that this illegally-obtained data had ended up at the heart of government, along with the contractors who might abuse it.

This apparently bizarre intersection of research on topics like love and kindness with defense and intelligence interests is not, in fact, particularly unusual. It is typical of the kind of dual-use research that has shaped the field of social psychology in the US since World War II.

Much of the classic, foundational research on personality, conformity, obedience, group polarization, and other such determinants of social dynamics -- while ostensibly civilian -- was funded during the cold war by the military and the CIA. The cold war was an ideological battle, so, naturally, research on techniques for controlling belief was considered a national security priority. This psychological research laid the groundwork for propaganda wars and for experiments in individual "mind control."

The pioneering figures from this era -- for example, Gordon Allport on personality and Solomon Asch on belief conformity -- are still cited in NATO psy-ops literature to this day .."

Craig H. , , March 24, 2018 at 3:42 pm

This is an issue which has frustrated me greatly. In spite of the fact that the country's leading psychologist (at the very least one of them -- ex-APA president Seligman) has been documented taking consulting fees from Guantanamo and Black Sites goon squads, my social science pals refuse to recognize any corruption at the core of their so-called replicated quantitative research.

I have asked more than five people to point at the best critical work on the Big 5 Personality theory and they all have told me some variant of "it is the only way to get consistent numbers". Not one has ever retreated one step or been receptive to the suggestion that this might indicate some fallacy in trying to assign numbers to these properties.

They eat their own dog food all the way and they seem to be suffering from a terrible malnutrition. At least the anthropologists have Price . (Most of that book can be read for free in installments at Counterpunch.)

[Mar 14, 2018] Washington policies as the result of a monumental unconscious group-think based on individual self interest

Individual are highly rewarded i f they "accept the party-line" that masquerades as US interests".
Rebels, individual thinkers tend to get fired, not promoted, snubbed
Notable quotes:
"... The individuals who work in our State Dept., CIA, DOD, corporate defense contractors, lobbyists, politicians, media......these individuals appear to benefit on an indivdual level (promotions, high paying jobs, social acceptance, nice neighborhoods and schools for their kids) when they "accept the party-line" that masquerades as US interests". ..."
Mar 14, 2018 | turcopolier.typepad.com

walter, March 2018 at 03:03 PM

Jack, in my opinion, there is no "US". The "US" doesn't have an interest.

There are individuals who behave in their own individual self interest.

The individuals who work in our State Dept., CIA, DOD, corporate defense contractors, lobbyists, politicians, media......these individuals appear to benefit on an indivdual level (promotions, high paying jobs, social acceptance, nice neighborhoods and schools for their kids) when they "accept the party-line" that masquerades as US interests".

Its a monumental unconscious group-think based on individual self interest.

This is my understanding of "the Borg" and "US interests", "US foreign policy goals"....they are actually individual interests shaped by what individuals who work in this realm believe they should believe and espouse to achieve their own goals. Rebels, individual thinkers tend to get fired, not promoted, snubbed

[Mar 12, 2018] There is no democracy without economic democracy by Jason Hirthler

Highly recommended!
Like many high demand cults neoliberalism is a trap, from which it is very difficult to escape...
Notable quotes:
"... A large, open-border global free market would be left, not subject to popular control but managed by a globally dispersed, transnational one percent. And the whole process of making this happen would be camouflaged beneath the altruistic stylings of a benign humanitarianism. ..."
"... Globalists, as neoliberal capitalists are often called, also understood that democracy, defined by a smattering of individual rights and a voting booth, was the ideal vehicle to usher neoliberalism into the emerging world. Namely because democracy, as commonly practiced, makes no demands in the economic sphere. Socialism does. Communism does. These models directly address ownership of the means of production. Not so democratic capitalism. This permits the globalists to continue to own the means of production while proclaiming human rights triumphant in nations where interventions are staged. ..."
"... The enduring lie is that there is no democracy without economic democracy. ..."
turcopolier.typepad.com

Part 3 - A False Promise

This 'Washington Consensus' is the false promise promoted by the West. The reality is quite different. The crux of neoliberalism is to eliminate democratic government by downsizing, privatizing, and deregulating it. Proponents of neoliberalism recognize that the state is the last bulwark of protection for the common people against the predations of capital. Remove the state and they'll be left defenseless .

Think about it. Deregulation eliminates the laws. Downsizing eliminates departments and their funding. Privatizing eliminates the very purpose of the state by having the private sector take over its traditional responsibilities.

Ultimately, nation-states would dissolve except perhaps for armies and tax systems. A large, open-border global free market would be left, not subject to popular control but managed by a globally dispersed, transnational one percent. And the whole process of making this happen would be camouflaged beneath the altruistic stylings of a benign humanitarianism.

Globalists, as neoliberal capitalists are often called, also understood that democracy, defined by a smattering of individual rights and a voting booth, was the ideal vehicle to usher neoliberalism into the emerging world. Namely because democracy, as commonly practiced, makes no demands in the economic sphere. Socialism does. Communism does. These models directly address ownership of the means of production. Not so democratic capitalism. This permits the globalists to continue to own the means of production while proclaiming human rights triumphant in nations where interventions are staged.

The enduring lie is that there is no democracy without economic democracy.

What matters to the one percent and the media conglomerates that disseminate their worldview is that the official definitions are accepted by the masses. The real effects need never be known. The neoliberal ideology (theory) thus conceals the neoliberal reality (practice). And for the masses to accept it, it must be mass produced. Then it becomes more or less invisible by virtue of its universality.

Source, links:

https://www.counterpunch.org/2018/03/02/colonizing-the-western-mind/
[ 1 ] [ 2 ]

[Mar 12, 2018] Colonizing the Western Mind using think tanks

Highly recommended!
Notable quotes:
"... In a short span of time in the 1970s, dozens of think tanks were established across the western world and billions of dollars were spent proselytizing the tenets of the Powell Memo in 1971, which galvanized a counter-revolution to the liberal upswing of the Sixties. The neoliberal economic model of deregulation, downsizing, and privatization was preached by the Reagan-Thatcher junta, liberalized by the Clinton regime, temporarily given a bad name by the unhinged Bush administration, and saved by telegenic restoration of the Obama years. ..."
"... Today think tanks like the Heritage Foundation, the Brookings Institute, Stratfor, Cato Institute, American Enterprise Institute, Council on Foreign Relations, Carnegie Endowment, the Open Society Foundation, and the Atlantic Council, among many others, funnel millions of dollars in donations into cementing neoliberal attitudes in the American mind. ..."
"... The ideological assumptions, which serve to justify what you could call neocolonial tactics, are relatively clear: the rights of the individual to be free of overreach from monolithic institutions like the state. Activist governments are inherently inefficient and lead directly to totalitarianism. Markets must be free and individuals must be free to act in those markets. People must be free to choose, both politically and commercially, in the voting booth and at the cash register. ..."
"... This conception of markets and individuals is most often formulated as "free-market democracy," a misleading conceit that conflates individual freedom with the economic freedom of capital to exploit labor. So when it comes to foreign relations, American and western aid would only be given on the condition that the borrowers accepted the tenets of an (highly manipulable) electoral system and vowed to establish the institutions and legal structures required to fully realize a western market economy. ..."
Mar 12, 2018 | www.counterpunch.org

In Christopher Nolan's captivating and visually dazzling film Inception, a practitioner of psychic corporate espionage must plant and idea inside a CEO's head. The process is called inception, and it represents the frontier of corporate influence, in which mind spies no longer just "extract" ideas from the dreams of others, but seed useful ideas in a target's subconscious.

Inception is a well-crafted piece of futuristic sci-fi drama, but some of the ideas it imparts are already deeply embedded in the American subconscious.

The notion of inception, of hatching an idea in the mind of a man or woman without his or her knowledge, is the kernel of propaganda, a black art practiced in the States since the First World War. Today we live beneath an invisible cultural hegemony, a set of ideas implanted in the mass mind by the U.S. state and its corporate media over decades. Invisibility seems to happen when something is either obscure or ubiquitous. In a propaganda system, an overarching objective is to render the messaging invisible by universalizing it within the culture. Difference is known by contrast. If there are no contrasting views in your field of vision, it's easier to accept the ubiquitous explanation. The good news is that the ideology is well-known to some who have, for one lucky reason or another, found themselves outside the hegemonic field and are thus able to contrast the dominant worldview with alternative opinions. On the left, the ruling ideology might be described as neoliberalism, a particularly vicious form of imperial capitalism that, as would be expected, is camouflaged in the lineaments of humanitarian aid and succor.

Inception 1971

In a short span of time in the 1970s, dozens of think tanks were established across the western world and billions of dollars were spent proselytizing the tenets of the Powell Memo in 1971, which galvanized a counter-revolution to the liberal upswing of the Sixties. The neoliberal economic model of deregulation, downsizing, and privatization was preached by the Reagan-Thatcher junta, liberalized by the Clinton regime, temporarily given a bad name by the unhinged Bush administration, and saved by telegenic restoration of the Obama years.

The ideology that underlay the model saturated academia, notably at the University of Chicago, and the mainstream media, principally at The New York Times. Since then it has trickled down to the general populace, to whom it now feels second nature.

Today think tanks like the Heritage Foundation, the Brookings Institute, Stratfor, Cato Institute, American Enterprise Institute, Council on Foreign Relations, Carnegie Endowment, the Open Society Foundation, and the Atlantic Council, among many others, funnel millions of dollars in donations into cementing neoliberal attitudes in the American mind.

The ideological assumptions, which serve to justify what you could call neocolonial tactics, are relatively clear: the rights of the individual to be free of overreach from monolithic institutions like the state. Activist governments are inherently inefficient and lead directly to totalitarianism. Markets must be free and individuals must be free to act in those markets. People must be free to choose, both politically and commercially, in the voting booth and at the cash register.

This conception of markets and individuals is most often formulated as "free-market democracy," a misleading conceit that conflates individual freedom with the economic freedom of capital to exploit labor. So when it comes to foreign relations, American and western aid would only be given on the condition that the borrowers accepted the tenets of an (highly manipulable) electoral system and vowed to establish the institutions and legal structures required to fully realize a western market economy.

These demands were supplemented with notions of the individual right to be free of oppression, some fine rhetoric about women and minorities, and somewhat more quietly, a judicial understanding that corporations were people, too. Together, an unshackled economy and an unfettered populace, newly equipped with individual rights, would produce the same flourishing and nourishing demos of mid-century America that had been the envy of humanity.

[Mar 03, 2018] Strange science, economics. Judging from the titles, much of it consists of neoliberal cheerleading

Neoliberal economists are a new type of clergy. As simple as this. Neoliberal God is great that's what they are preaching to students.
Notable quotes:
"... Bronze Age: Greatest Age EVAH! ..."
"... It's surprising economists feel the need to engage in happy talk, considering that markets are supposed to be natural, just, and efficient. Like clergy preaching to a perpetually backsliding laity about the one true God, Whom only a fool would doubt. If God were so great, there'd be no need to harp on it. In any case, this goes some way toward accounting for Bennet's statement. ..."
"... It takes a half-educated person to say something like that. First you get the ideas by way of a certain education, and then you don't think about them, in part because the educators discourage that kind of thing. ..."
Mar 03, 2018 | www.nakedcapitalism.com

Paul Cardan , March 2, 2018 at 3:12 pm

"[Capitalism] has been the greatest engine of, it's been the greatest anti-poverty program and engine of progress that we've seen."

I can almost smell the economics section of my local bookstore. Strange science, economics. Judging from the titles, much of it consists of cheerleading. Very different from history, anthropology, or sociology.

I never see history titles like Bronze Age: Greatest Age EVAH! It's surprising economists feel the need to engage in happy talk, considering that markets are supposed to be natural, just, and efficient. Like clergy preaching to a perpetually backsliding laity about the one true God, Whom only a fool would doubt. If God were so great, there'd be no need to harp on it. In any case, this goes some way toward accounting for Bennet's statement.

It takes a half-educated person to say something like that. First you get the ideas by way of a certain education, and then you don't think about them, in part because the educators discourage that kind of thing.

If America Wasn't America, The United States Would Be Bombing It". Posted by: john | Feb 13, 2018 6:07:37 AM | 43

[Feb 14, 2018] "The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary." - H. L. Mencken, 1880-1956. american writer

[Feb 11, 2018] Social psychologists have long talked about how emotional manipulation can work effectively to snooker a large percentage of the population, to get them, at least temporarily, to believe the exact opposite of the facts

Notable quotes:
"... These techniques are known in the intelligence community as "perception management," and have been refined since the 1980s "to keep the American people compliant and confused," as the late Robert Parry has reported . ..."
"... Population in the country was very poorly informed any how. And now, they, The Ruling Establishment which includes Media, have completely messed the people up -- making them compliant and confused. ..."
"... Does any body have idea how they are going to bring an end to this completely concocted bizarre drama? ..."
Feb 09, 2018 | consortiumnews.com

Originally from: 'This is Nuts' Liberals Launch 'Largest Mobilization in History' in Defense of Russiagate Probe – Consortiumnews By Coleen Rowley and Nat Parry

... ... ...

Social psychologists have long talked about how emotional manipulation can work effectively to snooker a large percentage of the population, to get them, at least temporarily, to believe the exact opposite of the facts.

These techniques are known in the intelligence community as "perception management," and have been refined since the 1980s "to keep the American people compliant and confused," as the late Robert Parry has reported .

We saw this in action last decade, when after months of disinformation, about 70% of Americans came to falsely believe that Saddam Hussein was behind 9/11 when the truth was the opposite – Saddam was actually an enemy of the Al Qaeda perpetrators.

... ... ...

Coleen Rowley, a retired FBI special agent and division legal counsel whose May 2002 memo to then-FBI Director Robert Mueller exposed some of the FBI's pre-9/11 failures, was named one of TIME magazine's "Persons of the Year" in 2002.

Nat Parry is co-author of Neck Deep: The Disastrous Presidency of George W. Bush . weilunion , February 9, 2018 at 5:35 pm

"Social psychologists have long talked about how emotional manipulation can work effectively to snooker a large percentage of the population, to get them, at least temporarily, to believe the exact opposite of the facts. These techniques are known in the intelligence community as "perception management," and have been refined since the 1980s "to keep the American people compliant and confused," as the late Robert Parry has reported. We saw this in action last decade, when after months of disinformation, about 70% of Americans came to falsely believe that Saddam Hussein was behind 9/11 when the truth was the opposite -- Saddam was actually an enemy of the Al Qaeda perpetrators."

Cognitive dissonance, lack of critical thinking, reliance on authority, in this case a former head of a criminal organization called the FBI.

People have no class consciousness. They have no idea who their enemies ar or how to organize.

This is the sad case of liberalism melting like warm butter while the fascists congeal.

Joe Tedesky , February 9, 2018 at 7:27 pm

Nicely put.

Dave P. , February 10, 2018 at 2:51 am

"Social psychologists have long talked about how emotional manipulation can work effectively to snooker a large percentage of the population, to get them, at least temporarily, to believe the exact opposite of the facts. . ."

Yes. On any bar counter, just start some conversation with the person sitting to you. With all this bizarre drama -- Russia-Gate, Iran, memos, dossier . . . going on TV, and in Washington being enacted knowingly by the the Powers who rule -- both, so called Liberals and Conservatives -- one can see how this emotional manipulation has worked to snooker just about most of the population. I just had the experience today during lunch at a bar counter. In our conversation, the person sitting next to me was ready to nuke Iran, N. Korea, and go after Russia; and go after Hillary too.

Population in the country was very poorly informed any how. And now, they, The Ruling Establishment which includes Media, have completely messed the people up -- making them compliant and confused.

Does any body have idea how they are going to bring an end to this completely concocted bizarre drama?

[Feb 10, 2018] The generals are not Borgists. They are something worse ...

Highly recommended!
Notable quotes:
"... The post WW2 promotion process in the armed forces has produced a group at the top with a mentality that typically thinks rigorously but not imaginatively or creatively. ..."
"... These men got to their present ranks and positions by being conformist group thinkers who do not stray outside the "box" of their guidance from on high. They actually have scheduled conference calls among themselves to make sure everyone is "on board." ..."
"... If asked at the top, where military command and political interaction intersect, what policy should be they always ask for more money and to be allowed to pursue outcomes that they can understand as victory and self fulfilling with regard to their collective self image as warrior chieftains. ..."
"... In Trump's time his essential disinterest in foreign policy has led to a massive delegation of authority to Mattis and the leadership of the empire's forces. Their reaction to that is to look at their dimwitted guidance from on high (defeat IS, depose Assad and the SAG, triumph in Afghanistan) and to seek to impose their considerable available force to seek accomplishment as they see fit of this guidance in the absence of the kind of restrictions that Obama placed on them. ..."
"... Like the brass, I, too, am a graduate of all those service schools that attend success from the Basic Course to the Army War College. I will tell you again that the people at the top are not good at "the vision thing." They are not stupid at all but they are a collective of narrow thinkers ..."
"... Academia reinforces the groupthink. The mavericks are shunned or ostracized. The only ones I have seen with some degree of going against the grain are technology entrepreneurs. ..."
"... "They are not stupid at all but they are a collective of narrow thinkers." I have found this to be the case with 80 to 90% of most professions. A good memory and able to perform meticulously what they have been taught, but little thinking outside that narrow box. Often annoying, but very dangerous in this case. ..."
"... Since Afghanistan and the brass were mentioned in the editorial statement, here is an immodest question -- Where the brass have been while the opium production has been risen dramatically in Afghanistan under the US occupation? "Heroin Addiction in America Spearheaded by the US-led War on Afghanistan" by Paul Craig Roberts: https://www.paulcraigroberts.org/2018/02/06/heroin-addiction-america-spearheaded-us-led-war-afghanistan/ ..."
"... A simple Q: What has been the role of the CENTCOM re the racket? Who has arranged the protection for the opium production and for drug dealers? Roberts suggests that the production of opium in Afghanistan "finances the black operations of the CIA and Western intelligence agencies." -- All while Awan brothers, Alperovitch and such tinker with the US national security? ..."
"... God help the poor people of Syria. ..."
"... thanks pat... it seems like the usa has had a steady group of leaders that have no interest in the world outside of the usa, or only in so far as they can exploit it for their own interest... maybe that sums up the foreign policy of the usa at this point... you say trump is disinterested.. so all the blather from trump about 'why are we even in syria?', or 'why can't we be friends with the russia?' is just smoke up everyone's ass... ..."
"... Predictably there is always someone who says that this group is not different from all others. Unfortunately the military function demands more than the level of mediocrity found in most groups ..."
"... A lot of technology entrepreneurs--especially those active today--are stuck in their own groupthink, inflated by their sense that they are born for greatness and can do no wrong. ..."
"... The kind of grand schemes that the top people at Google, Uber, and Facebook think up to remake the universe in their own idea of "good society" are frightening. That they are cleverer (but not necessarily wiser) than the academics, borgists, or generals, I think, makes them even more dangerous. ..."
"... They [the generals] seem to have deliberately completely ignored the issues and policy positions Trump ran on as President. It isn't a case of ignorance but of wilful disregard. ..."
"... So true and as others commented this is a sad feature of the human race and all human organizations. Herd mentality ties into social learning ..."
"... Our massive cultural heritages are learned by observing and taken in as a whole. This process works within organizations as well. ..."
"... I suspect a small percentage of the human race functions differently than the majority and retains creative thinking and openness along with more emphasis on cognitive thinking than social learning but generally they always face a battle when working to change the group "consensus", i.e. Fulton's folly, scepticism on whether man would ever fly, etc. ..."
"... This is an interesting discussion. The top in organisations (civil and military) are increasingly technocrats and thinking like systems managers. They are unable to innovate because they lack the ability to think out of the box. Usually there is a leader who depends on specialists. Others (including laymen) are often excluding from the decision-making-proces. John Ralston Saul's Voltaires Bastards describes this very well. ..."
"... Because of natural selection (conformist people tend to choose similar people who resemble their own values and ways-of-thinking) organizations have a tendency to become homogeneous (especially the higher management/ranks). ..."
"... In combination with the "dumbing" of people (also of people who have a so-called good education (as described in Richard Sale's Sterile Chit-Chat ) this is a disastrous mix. ..."
"... That's true not only of the US military but of US elites in general across all of the spectra. And because that reality is at odds with the group-think of those within the various elements that make up the spectra it doesn't a hearing. Anyone who tries to bring it up risks being ejected from the group. ..."
"... "The United States spent at least $12 billion in Syria-related military and civilian expenses in the four years from 2014 through 2017, according to the former U.S. ambassador to the country. This $12 billion is in addition to the billions more spent to pursue regime change in Syria in the previous three years, after war broke out in 2011." https://goo.gl/8pj5cD ..."
"... "They are not stupid at all but they are a collective of narrow thinkers." I've often pondered that concept. Notice how many of radical extremist leaders were doctors, engineers and such? Narrow and deep. ..."
"... Long ago when I was a professor, I advised my students that "the law is like a pencil sharpener, it sharpens the mind by narrowing it." I tried to encourage them to "think backwards". ..."
"... Col, I think it might help people to think of "the Borg" - as you have defined & applied it - in a broader context. It struck me particularly as you ID'd the launching of our modern military group-think / careerism behavior coming from the watershed of industrialized scale & processes that came out of WWII. ..."
"... We note parallel themes in all significant sectors of our civilization. The ever-expanding security state, the many men in Gray Flannel Suits that inhabit corporate culture, Finance & Banking & Big Health scaling ever larger - all processes aimed to slice the salami thinner & quicker, to the point where meat is moot ... and so it goes. ..."
"... I just finished reading Command & Control (about nuclear weapons policy, systems design & accidents). I am amazed we've made it this far. ..."
Feb 10, 2018 | turcopolier.typepad.com

(Editorial Statement)

The Borgist foreign policy of the administration has little to do with the generals. To comprehend the generals one must understand their collective mentality and the process that raised them on high as a collective of their own. The post WW2 promotion process in the armed forces has produced a group at the top with a mentality that typically thinks rigorously but not imaginatively or creatively.

These men got to their present ranks and positions by being conformist group thinkers who do not stray outside the "box" of their guidance from on high. They actually have scheduled conference calls among themselves to make sure everyone is "on board."

If asked at the top, where military command and political interaction intersect, what policy should be they always ask for more money and to be allowed to pursue outcomes that they can understand as victory and self fulfilling with regard to their collective self image as warrior chieftains.

In Obama's time they were asked what policy should be in Afghanistan and persuaded him to reinforce their dreams in Afghanistan no matter how unlikely it always was that a unified Western oriented nation could be made out of a collection of disparate mutually alien peoples.

In Trump's time his essential disinterest in foreign policy has led to a massive delegation of authority to Mattis and the leadership of the empire's forces. Their reaction to that is to look at their dimwitted guidance from on high (defeat IS, depose Assad and the SAG, triumph in Afghanistan) and to seek to impose their considerable available force to seek accomplishment as they see fit of this guidance in the absence of the kind of restrictions that Obama placed on them.

Like the brass, I, too, am a graduate of all those service schools that attend success from the Basic Course to the Army War College. I will tell you again that the people at the top are not good at "the vision thing." They are not stupid at all but they are a collective of narrow thinkers. pl


Jack , 09 February 2018 at 05:42 PM

Sir

IMO, this conformism pervades all institutions. I saw when I worked in banking and finance many moons ago how moving up the ranks in any large organization meant you didn't rock the boat and you conformed to the prevailing groupthink. Even nutty ideas became respectable because they were expedient.

Academia reinforces the groupthink. The mavericks are shunned or ostracized. The only ones I have seen with some degree of going against the grain are technology entrepreneurs.

Fredw , 09 February 2018 at 06:26 PM
You remind me of an old rumination by Thomas Ricks:

Take the example of General George Casey. According to David Cloud and Greg Jaffe's book Four Stars, General Casey, upon learning of his assignment to command U.S. forces in Iraq, received a book from the Army Chief of Staff. The book Counterinsurgency Lessons Learned from Malaya and Vietnam was the first book he ever read about guerilla warfare." This is a damning indictment of the degree of mental preparation for combat by a general. The Army's reward for such lack of preparation: two more four star assignments.

http://foreignpolicy.com/2012/02/07/cmon-man-meathead-generals-and-some-other-things-that-are-driving-me-crazy-about-life-in-this-mans-post-911-army/

Peter AU , 09 February 2018 at 06:37 PM
"They are not stupid at all but they are a collective of narrow thinkers." I have found this to be the case with 80 to 90% of most professions. A good memory and able to perform meticulously what they have been taught, but little thinking outside that narrow box. Often annoying, but very dangerous in this case.
Anna , 09 February 2018 at 06:48 PM
Since Afghanistan and the brass were mentioned in the editorial statement, here is an immodest question -- Where the brass have been while the opium production has been risen dramatically in Afghanistan under the US occupation? "Heroin Addiction in America Spearheaded by the US-led War on Afghanistan" by Paul Craig Roberts: https://www.paulcraigroberts.org/2018/02/06/heroin-addiction-america-spearheaded-us-led-war-afghanistan/

" in 2000-2001 the Taliban government –with the support of the United Nations (UNODC) – implemented a successful ban on poppy cultivation. Opium production which is used to produce grade 4 heroin and its derivatives declined by more than 90 per cent in 2001. The production of opium in 2001 was of the order of a meager 185 tons. It is worth noting that the UNODC congratulated the Taliban Government for its successful opium eradication program. The Taliban government had contributed to literally destabilizing the multibillion dollar Worldwide trade in heroin.

In 2017, the production of opium in Afghanistan under US military occupation reached 9000 metric tons. The production of opium in Afghanistan registered a 49 fold increase since Washington's invasion. Afghanistan under US military occupation produces approximately 90% of the World's illegal supply of opium which is used to produce heroin. Who owns the airplanes and ships that transport heroin from Afghanistan to the US? Who gets the profits?"

---A simple Q: What has been the role of the CENTCOM re the racket? Who has arranged the protection for the opium production and for drug dealers? Roberts suggests that the production of opium in Afghanistan "finances the black operations of the CIA and Western intelligence agencies." -- All while Awan brothers, Alperovitch and such tinker with the US national security?

J , 09 February 2018 at 07:05 PM
Colonel,

There needs to be a 're-education' of the top, all of them need to be required to attend Green Beret think-school, in other words they need to be forced to think outside the box, and to to think on their feet. They need to understand fluid situations where things change at the drop of a hat, be able to dance the two-step and waltz at the same time. In other words they need to be able to walk and chew gum and not trip over their shoe-laces.

By no means are they stupid, but you hit the nail on the head when you said 'narrow thinkers'. Their collective hive mentality that has developed is not a good thing.

divadab , 09 February 2018 at 07:16 PM
God help the poor people of Syria.
james , 09 February 2018 at 07:30 PM
thanks pat... it seems like the usa has had a steady group of leaders that have no interest in the world outside of the usa, or only in so far as they can exploit it for their own interest... maybe that sums up the foreign policy of the usa at this point... you say trump is disinterested.. so all the blather from trump about 'why are we even in syria?', or 'why can't we be friends with the russia?' is just smoke up everyone's ass...

i like what you said here "conformist group thinkers who do not stray outside the "box" of their guidance from on high. They actually have scheduled conference calls among themselves to make sure everyone is "on board." - that strikes me as very true - conformist group thinkers... the world needs less of these types and more actual leaders who have a vision for something out of the box and not always on board... i thought for a while trump might fill this bill, but no such luck by the looks of it now..

David E. Solomon , 09 February 2018 at 07:50 PM
Colonel Lang,

Your description of these guys sounds like what we have heard about Soviet era planners. Am I correct in my understanding, or am I missing something?

Regards,

David

DianaLC , 09 February 2018 at 07:56 PM
As a young person in eighth grade, I learned about the "domino theory" in regard to attempts to slow the spread of communism. Then my generation was, in a sense, fractured around the raging battles for and against our involvement in Vietnam.

I won't express my own opinion on that. But I mention it because it seems to be a type of "vision thing."

So, now I ask, what would be your vision for the Syrian situation?

Bill Herschel , 09 February 2018 at 09:11 PM
This has been going on for a long time has it not? Westmoreland? MacArthur?

How did this happen?

turcopolier , 09 February 2018 at 09:40 PM
Bill Herschel

Westmoreland certainly, Macarthur certainly not. This all started with the "industrialization" of the armed forces in WW2. we never recovered the sense of profession as opposed to occupation after the massive expansion and retention of so many placeholders. a whole new race of Walmart manager arose and persists. pl

turcopolier , 09 February 2018 at 09:48 PM
DianaC

The idea of the Domino Theory came from academia, not the generals of that time. They resisted the idea of a war in east Asia until simply ordered into it by LBJ. After that their instinct for acting according to guidance kicked in and they became committed to the task. Syria? Do you think I should write you an essay on that? SST has a large archive and a search machine. pl

turcopolier , 09 February 2018 at 09:55 PM
David E. Solomon

I am talking about flag officers at present, not those beneath them from the mass of whom they emerge. There are exceptions. Martin Dempsey may have been one such. The system creates such people at the top. pl

turcopolier , 09 February 2018 at 10:08 PM
elaine,

Your usual animosity for non-left wing authority is showing. A commander like the CENTCOM theater commander (look it up) operates within guidance from Washington, broad guidance. Normally this is the president's guidance as developed in the NSC process. Some presidents like Obama and LBJ intervene selectively and directly in the execution of that guidance. Obama had a "kill list" of jihadis suggested by the IC and condemned by him to die in the GWOT. He approved individual missions against them. LBJ picked individual air targets in NVN. Commanders in the field do not like that . They think that freedom of action within their guidance should be accorded them. This CinC has not been interested thus far in the details and have given the whole military chain of command wide discretion to carry out their guidance. pl

turcopolier , 09 February 2018 at 10:12 PM
J

Thank you, but it is real GBs that you like, not the Delta and SEAL door kickers. pl

turcopolier , 09 February 2018 at 10:24 PM
Gaikomainaku

"I am not sure that I understand what makes a Borgist different from a military conformist." The Borg and the military leaders are not of the same tribe. they are two different collectives who in the main dislike and distrust each other. pl

turcopolier , 09 February 2018 at 10:27 PM
Anna. Their guidance does not include a high priority for eradicating the opium trade. Their guidance has to do with defeating the jihadis and building up the central government. pl
turcopolier , 09 February 2018 at 10:30 PM
Peter AU

Predictably there is always someone who says that this group is not different from all others. Unfortunately the military function demands more than the level of mediocrity found in most groups. pl

turcopolier , 09 February 2018 at 10:44 PM
james

Trump would like to better relations with Russia but that is pretty much the limit of his attention to foreign affairs at any level more sophisticated than expecting deference. He is firmly focused on the economy and base solidifying issues like immigration. pl

Peter AU , 09 February 2018 at 11:01 PM
The medical profession comes to mind. GP's and specialists. Many of those working at the leading edge of research seem much wider thinking and are not locked into the small box of what they have been taught.
turcopolier , 09 February 2018 at 11:16 PM
Peter AU

The GPs do not rule over a hierarchy of doctors. pl

J -> turcopolier ... , 09 February 2018 at 11:22 PM
Combat Applications Group and SEALS don't even begin to compare, they're not in the same league as 'real deal' GBs. The GBs are thinkers as well as doers, whereas Combat Applications Group and SEALs all they know is breach and clear, breach and clear.

There is more to life than breach and clear. Having worked with all in one manner or another, I'll take GBs any day hands down. It makes a difference when the brain is engaged instead of just the heel.

kao_hsien_chih -> Jack... , 09 February 2018 at 11:22 PM
A lot of technology entrepreneurs--especially those active today--are stuck in their own groupthink, inflated by their sense that they are born for greatness and can do no wrong.

The kind of grand schemes that the top people at Google, Uber, and Facebook think up to remake the universe in their own idea of "good society" are frightening. That they are cleverer (but not necessarily wiser) than the academics, borgists, or generals, I think, makes them even more dangerous.

FB Ali , 09 February 2018 at 11:23 PM
Col Lang,

They are indeed "narrow thinkers", but I think the problem runs deeper. They seem to be stuck in the rut of a past era. When the US was indeed the paramount military power on the globe, and the US military reigned supreme. They can't seem to accept the reality of the world as it is now.

Of course, these policies ensure that they continue to be well-funded, even if the US is bankrupting itself in the process.

turcopolier , 10 February 2018 at 01:03 AM
dogear

He is still the Saudi Mukhtar for the US and most of the generals are still narrow minded. pl

LondonBob , 10 February 2018 at 06:59 AM
They [the generals] seem to have deliberately completely ignored the issues and policy positions Trump ran on as President. It isn't a case of ignorance but of wilful disregard.
turcopolier , 10 February 2018 at 07:55 AM
LondonBob

I think that is true but, they were able to talk him into that, thus far. pl

DianaLC said in reply to turcopolier ... , 10 February 2018 at 09:23 AM
I've been reading this blog for some time. My question was facetious and written with the understanding of your statement about the generals not having a good grasp of "the vision thing" on their own.
Terry , 10 February 2018 at 09:25 AM
So true and as others commented this is a sad feature of the human race and all human organizations. Herd mentality ties into social learning. Chimps are on average more creative and have better short term memory than humans. We gave up some short term memory in order to be able to learn quickly by mimicking. If shown how to open a puzzle box but also shown unnecessary extra steps a chimp will ignore the empty steps and open the box with only the required steps. A human will copy what they saw exactly performing the extra steps as if they have some unknown value to the process. Our massive cultural heritages are learned by observing and taken in as a whole. This process works within organizations as well.

I suspect a small percentage of the human race functions differently than the majority and retains creative thinking and openness along with more emphasis on cognitive thinking than social learning but generally they always face a battle when working to change the group "consensus", i.e. Fulton's folly, scepticism on whether man would ever fly, etc.

One nice feature of the internet allows creative thinkers to connect and watch the idiocy of the world unfold around us.

"A natural desire to be part of the 'in crowd' could damage our ability to make the right decisions, a new study has shown."

https://www.sciencedaily.com/releases/2014/12/141216212049.htm

TV , 10 February 2018 at 10:18 AM
The military by definition is a rigid hierarchical structure. It could not function as a collection of individuals. This society can only breed conforming narrow leaders as an "individual" would leave or be forced out.
Barbara Ann , 10 February 2018 at 10:22 AM
That part of our brain responsible for the desire to be part of the 'in crowd' may affect our decision-making process, but it is also the reason we keep chimps in zoos and not the other way around. Or, to put it another way; if chimps had invented Facebook, I might consider them more creative than us.
Babak Makkinejad -> Terry... , 10 February 2018 at 10:30 AM
Do you think chimps are, per the Christian Docrine, in a State of Fall or in a State of Grace?
Adrestia , 10 February 2018 at 10:32 AM
This is an interesting discussion. The top in organisations (civil and military) are increasingly technocrats and thinking like systems managers. They are unable to innovate because they lack the ability to think out of the box. Usually there is a leader who depends on specialists. Others (including laymen) are often excluding from the decision-making-proces. John Ralston Saul's Voltaires Bastards describes this very well.

Because of natural selection (conformist people tend to choose similar people who resemble their own values and ways-of-thinking) organizations have a tendency to become homogeneous (especially the higher management/ranks).

In combination with the "dumbing" of people (also of people who have a so-called good education (as described in Richard Sale's Sterile Chit-Chat ) this is a disastrous mix.

Homogeneity is the main culprit. A specialists tends to try to solve problems with the same knowledge-set that created these.

Not all (parts of) organizations and people suffer this fate. Innovations are usually done by laymen and not by specialists. The organizations are often heterogeneous and the people a-typical and/or eccentric.

(mainly the analytical parts of ) intelligence organizations and investment banks are like that if they are worth anything. Very heterogeneous with a lot of a-typical people. I think Green Berets are also like that. An open mind and genuine interest in others (cultures, way of thinking, religion etc) is essential to understand and to perform and also to prevent costly mistakes (in silver and/or blood).

It is possible to create firewalls against tunnel-vision. The Jester performed such a role. Also think of the Emperors New Clothes . The current trend of people with limited vision and creativity prevents this. Criticism is punished with a lack of promotion, job-loss or even jail (whistle-blowers)

IMO this is why up to a certain rank (colonel or middle management) a certain amount of creativity or alternative thinking is allowed, but conformity is essential to rise higher.

I was very interested in the Colonel's remark on the foreign background of the GB in Vietnam. If you would like to expand on this I would be much obliged? IMO GB are an example of a smart, learning, organization (in deed and not only in word as so many say of themselves, but who usually are at best mediocre)

Generalfeldmarschall von Hindenburg -> gaikokumaniakku... , 10 February 2018 at 11:58 AM
Isn't the "Borg" really The Atlantic Council?
ISL , 10 February 2018 at 12:58 PM
Dear Colonel,

Would you then say that a rising military officer who does have the vision thing faces career impediments? If so, would you say that the vision thing is lost (if it ever was there) at the highest ranks? In any case, the existence of even a few at the top, like Matthis or Shinseki is a blessing.

ex-PFC Chuck said in reply to FB Ali ... , 10 February 2018 at 01:08 PM
FB Ali:
"When the US was indeed the paramount military power on the globe, and the US military reigned supreme. They can't seem to accept the reality of the world as it is now."
That's true not only of the US military but of US elites in general across all of the spectra. And because that reality is at odds with the group-think of those within the various elements that make up the spectra it doesn't a hearing. Anyone who tries to bring it up risks being ejected from the group.
Adrestia , 10 February 2018 at 02:03 PM
I forget an important part. I really miss an edit-button. Comment-boxes are like looking at something through a straw. Its easy to miss the overview.

Innovations and significant new developments are usually made by laymen. IMO mainly because they have a fresh perspective without being bothered by the (mainstream) knowledge that dominates an area of expertise.

By excluding the laymen errors will continue to be repeated. This can be avoided by using development/decision-making frameworks, but these tend to become dogma (and thus become part of the problem)

Much better is allowing laymen and allowing a-typical people. Then listen to them carefully. Less rigid flexible and very valuable.

kooshy , 10 February 2018 at 02:19 PM
Apparently, according to the last US ambassador to Syria Mr. Ford, from 2014-17 US has spent 12 Billion on Regime change in Syria. IMO, combinedly Iran and Russia so far, have spent far less in Syria than 12 billion by US alone, not considering the rest of her so called coalition. This is a war of attrition, and US operations in wars, are usually far more expensive and longer than anybody else's.

"The United States spent at least $12 billion in Syria-related military and civilian expenses in the four years from 2014 through 2017, according to the former U.S. ambassador to the country. This $12 billion is in addition to the billions more spent to pursue regime change in Syria in the previous three years, after war broke out in 2011." https://goo.gl/8pj5cD

J , 10 February 2018 at 02:49 PM
Colonel, TTG, PT,

FYI regarding Syria

https://www.nbcnews.com/politics/donald-trump/sen-tim-kaine-demands-release-secret-trump-war-powers-memo-n846176

Richardstevenhack -> turcopolier ... , 10 February 2018 at 02:56 PM
It may "demand" it - but does it get it? Soldiers are just as human as everyone else.

I'm reminded of the staff sergeant with the sagging beer belly who informed me, "Stand up straight and look like a soldier..." Or the First Sergeant who was so hung over one morning at inspection that he couldn't remember which direction he was going down the hall to the next room to be inspected. I'm sure you have your own stories of less than competence.

It's a question of intelligence and imagination. And frankly, I don't see the military in any country receiving the "best and brightest" of that country's population, by definition. The fact that someone is patriotic enough to enter the military over a civilian occupation doesn't make them more intelligent or imaginative than the people who decided on the civilian occupation.

Granted, if you fail at accounting, you don't usually die. Death tends to focus the mind, as they say. Nonetheless, we're not talking about the grunts at the level who actually die, still less the relatively limited number of Special Forces. We're talking about the officers and staff at the levels who don't usually die in war - except maybe at their defeat - i.e., most officers over the level of captain.

One can hardly look at this officer crowd in the Pentagon and CENTCOM and say that their personal death concentrates their mind. They are in virtually no danger of that. Only career death faces them - with a nice transition to the board of General Dynamics at ten times the salary.

All in all, I'd have to agree that the military isn't much better at being competent - at many levels above the obvious group of hyper-trained Special Forces - any more than any other profession.

dogear said in reply to Terry... , 10 February 2018 at 02:59 PM
That is well put.most important is the grading system that is designed to fix a person to a particular slot thereby limiting his ability to think "outside the box" and consider the many variables that exist in one particular instant.

Creative thinking allows you to see beyond the storm clouds ahead and realize that the connectedness of different realities both the visible and invisible. For instance the picture of the 2 pairs of korean skaters in the news tells an interesting story on many levels. Some will judge them on their grade of proffiency, while others will see a dance of strategy between 2 foes and a few will know the results in advance and plan accordingly

https://www.google.com.au/amp/www.nbcolympics.com/news/north-south-korean-figure-skating-teams-practice-side-side%3famp?espv=1

Mark Logan said in reply to Peter AU... , 10 February 2018 at 03:30 PM
Peter AU

"They are not stupid at all but they are a collective of narrow thinkers." I've often pondered that concept. Notice how many of radical extremist leaders were doctors, engineers and such? Narrow and deep. STEM is enormously useful to us but seems to be a risky when implanted in shallow earth.

turcopolier , 10 February 2018 at 05:03 PM
Mark Logan

These narrow "but deep" thinkers were unable to grasp the nature of the Iraq War for the first couple of years. They thought of it as a rear area security problem, a combat in cities problem, anything but a popular rebellion based on xenophobia and anti-colonialism The IED problem? They spent several billion dollars on trying to find a technology fix and never succeeded. I know because they kept asking me to explain the war to them and then could not understand the answers which were outside their narrow thought. pl

turcopolier , 10 February 2018 at 05:13 PM
ISL

War College selectees, the national board selected creme de la creme test out as 50% SJs (conformists lacking vision) in Myers-Briggs terms and about 15% NTs (intellectuals). To survive and move upward in a system dominated by SJs, the NTs must pretend to be what they are not. A few succeed. I do not think Mattis is an intellectual merely because he has read a lot. pl

outthere , 10 February 2018 at 05:19 PM
Long ago when I was a professor, I advised my students that "the law is like a pencil sharpener, it sharpens the mind by narrowing it." I tried to encourage them to "think backwards".

My favorite example was a Japanese fisherman who recovered valuable ancient Chinese pottery. Everyone knew where an ancient ship had sunk, but the water was too deep to dive down to the wreck. And everyone knew the cargo included these valuable vases. And the fisherman was the first to figure out how to recover them. He attached a line to an octopus, and lowered it in the area, waited awhile, and pulled it up. Low and behold, the octopus had hidden in an ancient Chinese vase. The fisherman was familiar with trapping octopuses, by lowering a ceramic pot (called "takosubo") into the ocean, waiting awhile, then raising the vase with octopus inside. His brilliance was to think backwards, and use an octopus to catch a vase.

turcopolier , 10 February 2018 at 05:24 PM
TV

By your calculation people like Joe Stilwell and George Patton should not have existed. pl

turcopolier , 10 February 2018 at 05:31 PM
Adrestia

the original GBS were recruited in the 50s to serve in the OSS role with foreign guerrillas behind Soviet lines in th event of war in Europe. Aaron Bank, the founder, recruited several hundred experienced foreign soldiers from the likely countries who wanted to become American. By the time we were in VN these men were a small fraction of GBs but important for their expertise and professionalism. pl

ked , 10 February 2018 at 05:56 PM
Col, I think it might help people to think of "the Borg" - as you have defined & applied it - in a broader context. It struck me particularly as you ID'd the launching of our modern military group-think / careerism behavior coming from the watershed of industrialized scale & processes that came out of WWII.

We note parallel themes in all significant sectors of our civilization. The ever-expanding security state, the many men in Gray Flannel Suits that inhabit corporate culture, Finance & Banking & Big Health scaling ever larger - all processes aimed to slice the salami thinner & quicker, to the point where meat is moot ... and so it goes.

I note many Borgs... Borgism if you will. An organizational behavior that has emerged out of human nature having difficulty adapting to rapidly accelerating complexity that is just too hard to apprehend in a few generations. If (as many commenters on STT seem to...) one wishes to view this in an ideological or spiritual framework only, they may overlook an important truth - that what we are experiencing is a Battle Among Borgs for control over their own space & domination over the other Borgs. How else would we expect any competitive, powerful interest group to act?

In gov & industry these days, we observe some pretty wild outliers... attached to some wild outcomes. Thus the boring behavior of our political industries bringing forth Trump, our promethean technology sector yielding a Musk (& yes, a Zuckerberg).

I find it hard to take very seriously analysts that define their perspective based primarily upon their superior ideals & opposition to others. Isn't every person, every tribe, team or enterprise a borglet-in-becoming? Everybody Wants to Rule the World ... & Everybody Must Get Stoned... messages about how we are grappling with complexity in our times. I just finished reading Command & Control (about nuclear weapons policy, systems design & accidents). I am amazed we've made it this far.

Unfortunately, I would not be amazed if reckless, feckless leaders changed the status quo. I was particularly alarmed hearing Trump in his projection mode; "I would love to be able to bring back our country into a great form of unity, without a major event where people pull together, that's hard to do.

But I would like to do it without that major event because usually that major event is not a good thing." It strikes me that he could be exceptionally willing to risk a Major Event if he felt a form of unity, or self-preservation, was in the offing. I pray (& I do not pray often or easily) that the Generals you have described have enough heart & guts to honor their oath at its most profound level in the event of an Event.

turcopolier , 10 February 2018 at 06:00 PM
babak

As a time traveler from another age, I can only say that for me it means devotion to a set of mores peculiar to a particular profession as opposed to an occupation. pl

Barbara Ann -> outthere... , 10 February 2018 at 06:00 PM
Great example outthere.

Another springs to mind: James Lovelock (of Gaia hypothesis fame) was once part of the NASA team building the first probe to go to Mars to look for signs of life. Lovelock didn't make any friends when he told NASA they were wasting their time, there was none. When asked how he could be so sure, he explained that the composition of the Martian atmosphere made it impossible. "But Martian life may be able to survive under different conditions" was the retort. Lovelock then went on to explain his view that the evolution of microbial life determined the atmospheric composition on Earth, so should be expected to do the same if life had evolved on Mars. Brilliant backwards thinking which ought to have earned him the Nobel prize IMHO (for Gaia). Lovelock, a classic cross-disciplinary scientist, can't be rewarded with such a box-categorized honor, as his idea doesn't fit well into any one.

Another example of cross-disciplinary brilliance was Bitcoin, which has as much to do with its creator's deep knowledge of Anthropology (why people invented & use money) as his expertise in both Economics and Computer Science.

This is they key to creative thinking in my view - familiarity with different fields yields deeper insights.

[Feb 09, 2018] Economists data and models are so unreliable that they should be viewed more of a religious studies than natural science

Feb 09, 2018 | economistsview.typepad.com

llisa2u2 , February 06, 2018 at 11:01 AM

I am posting this info. to this site, as part of personal approach as a US citizen to try to get some REAL FACTS out into the supposedly professional platforms of economists. This platforms are woefully lacking in good, factual information to communicate to anyone, even amongst themselves, and especially to Joe living on an street, or hopefully any house on any street in the US.

Now, what am I posting? The information that I am posting is an example of confusing information that is extremely invalid and should NOT be posted by so-called reliable sources, of professional, or "expertise" information. The reason I am posting an article that is confusing is because this article by Krugman is also confusing, and just as unreliable as the "confusing article" that was written by Alan Harkin at INVESTOPEDIA.


http://bit.ly/2Eof6eM

If you can't believe Investopedia's information, then who can you believe? I am posting the article as an article that the reader can NOT believe. The linked article is absolutely mis-stating IRS facts. This article is one of many that confuse the message about corporate taxation.

Personally, I think it is deliberate. The title of the article: http://bit.ly/2Eof6eM
basically leads the reader "to believe" the article is about how much US corporations such as APPLE, GOOGLE etc. "actually" bottomline- deliver to IRS. BUT, wait, when the reader "really reads" the reader then notes, that the "charts" ONLY reflect the "tax rate". Now, that's a whole different story. Tax rate is not bottomline taxes paid.

So, now if my "logic" and conclusion is "faulty", please enlighten me. The IRS data and this article don't jive in the real world of statistical data. Here is link to STATISTA that is THE data base that is used by top researchers worldwide.

This link shows the REAL data and percentage of corporate TAX PAID, AND FUTURE projections for US etc. etc. I have selected the most obvious and easy to read chart.
The following link presents reliable fact VS The article from INVESTOPEDIA as garbage.

http://bit.ly/2Eof7iQ

I am writing that the article in Investopedia by Aaron Hankin is BS. The content of the article also attempts to establish correlations to S/P action that has absolutely NO plausible fact to make any correlation about anything. I am also writing that most of the media reports about "corporate tax" is BS. I also am writing that this article by Krugman is a fluff, nonsense piece that is also BS. If Krugman were an economist that had any concern about the US economy, he would have, and would be posting this link everywhere on earth.

All that I definitely am trying to do is to get "reasonable data" out there to influence the public mindset to counter BS and try to present FACTS, just like a lot of other intelligent readers are trying to do.

llisa2u2 said in reply to llisa2u2... , February 06, 2018 at 11:08 AM
Please ignore the "typos", I did not hit preview first in this posted version on economists view.
llisa2u2 said in reply to llisa2u2... , February 06, 2018 at 11:15 AM
Basically, I am saying that the political posturing, and propaganda strategies of so many different monied groups is demanding that any "serf" needs to present any comment as if the "serf" is writing some sort of thesis. Really, all the "Talking Faces" are the ones who should be doing that as they present messages to the public"serfs". Otherwise, there should be public disclaimers as to who is paying the "Talking Faces" for delivering their "propaganda". The "sponsored message" dynamics is so convoluted, that any viewer sure can't presume anything. Basically, It just looks like a lot of "Talking Faces" are just making themselves into asses, based on their assumption, and presumptions.
mulp said in reply to llisa2u2... , February 06, 2018 at 01:26 PM
Why do you think anyone associated with investors is an economist rather than a snake oil salesman in the medicine show that is extremely boring?

What to understand economics? Pay attention to Elon Musk, Jeff Bezos.

They pay US workers to build productive assets like factories, transportation products, energy harvesting products, information you want products, all of which can be matched only by competitors paying hundreds of billions to millions of US workers just to catch up in a decade.

Or you can read Keynes.

[Dec 31, 2017] Brainwashing as a key component of the US social system by Paul Craig Roberts

Highly recommended!
Notable quotes:
"... Whitehead documents how hard a not guilty verdict is to come by for an innocent defendant. Even if the falsely accused defendant and his attorney survive the prosecutor's pressure to negotiate a plea bargain and arrive at a trial, they are confronted with jurors who are unable to doubt prosecutors, police, or witnesses paid to lie against the innocent defendant. ..."
"... The question is: why do Americans not only sit silently while the lives of innocents are destroyed, but also actually support the destruction of the lives of innocents? Why do Americans believe "official sources" despite the proven fact that "official sources" lie repeatedly and never tell the truth? ..."
"... The only conclusion that one can come to is that the American people have failed. We have failed Justice. We have failed Mercy. We have failed the US Constitution. We have failed Truth. We have failed Democracy and representative government. We have failed ourselves and humanity. We have failed the confidence that our Founding Fathers put in us. We have failed God. If we ever had the character that we are told we had, we have obviously lost it. Little, if anything, remains of the "American character." ..."
"... The failure of the American character has had tremendous and disastrous consequences for ourselves and for the world. At home Americans have a police state in which all Constitutional protections have vanished. Abroad, Iraq and Libya, two formerly prosperous countries, have been destroyed. Libya no longer exists as a country. One million dead Iraqis, four million displaced abroad, hundreds of thousands of orphans and birth defects from the American ordnance, and continuing ongoing violence from factions fighting over the remains. These facts are incontestable. Yet the United States Government claims to have brought "freedom and democracy" to Iraq. "Mission accomplished," declared one of the mass murderers of the 21st century, George W. Bush. ..."
"... The question is: how can the US government make such an obviously false outrageous claim without being shouted down by the rest of the world and by its own population? Is the answer that good character has disappeared from the world? ..."
"... Or is the rest of the world too afraid to protest? Washington can force supposedly sovereign countries to acquiesce to its will or be cut off from the international payments mechanism that Washington controls, and/or be sanctioned, and/or be bombed, droned, or invaded, and/or be assassinated or overthrown in a coup. On the entire planet Earth there are only two countries capable of standing up to Washington, Russia and China, and neither wants to stand up if they can avoid it. ..."
"... For whatever the reasons, not only Americans but most of the world as well accommodate Washington's evil and are thereby complicit in the evil. Those humans with a moral conscience are gradually being positioned by Washington and London as "domestic extremists" who might have to be rounded up and placed in detention centers. Examine the recent statements by General Wesley Clark and British Prime Minister Cameron and remember Janet Napolitano's statement that the Department of Homeland Security has shifted its focus from terrorists to domestic extremists, an undefined and open-ended term. ..."
"... Americans with good character are being maneuvered into a position of helplessness. ..."
"... When Clinton's Secretary of State, Madeleine Albright, was asked if the Clinton's regime's sanctions, which had claimed the lives of 500,000 Iraqi children, were justified, she obviously expected no outrage from the American people when she replied in the affirmative. ..."
"... ... Americans are "intentionally ignorant" of other countries' rights and sovereignty while other countries had been well-informed of America's malicious intents of destroying other countries' rights and sovereignty ... ..."
"... No, I don't think Americans are intentionally ignorant, any more than other nationalities. What they are tribal. Tribal peoples don't care whether their policies are right or wrong; they are instinctively loyal to them and to those who formulate them. ..."
"... "The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. ...We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. ...In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons...who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind." -- Edward L. Bernays, Propaganda ..."
"... "Americans need to face the facts. The loss of character means the loss of liberty and the transformation of government into a criminal enterprise." ..."
"... "When a population becomes distracted by trivia, when cultural life is redefined as a perpetual round of entertainments, when serious public conversation becomes a form of baby-talk, when, in short, a people become an audience and their public business a vaudeville act, then a nation finds itself at risk; a culture-death is a clear possibility." ..."
"... Look at the demographics of the Western Hemisphere. If you have a shred of honesty you just can't hang the blame on 'whites', put it on a bumper sticker or a #shittyhashtagmeme and go back to fucking off. The disgusting fraud of Manifest Destiny was a fig leaf to hide the enormity of these crimes; but, they are most obviously European crimes....& has Europe changed since the West was settled? Did Europeans even stop their warring amongst themselves? ..."
"... "The loss of character means the loss of liberty and the transformation of government into a criminal enterprise." ..."
"... I agree with Paul Craig Roberts. He asks "Why" and "How." Well, Paul, here is my answer. Decades of Public Education and over 50 years of mass media monopoly. In an age where FOX is the top rated News station and CNN is considered liberal? Where kids in Public school are offered Chocolate milk and frozen pizza for school breakfast before going to class rooms with 30-40 kids. When Texas political appointees chose school text book content for the nation? A nation where service has ended, replaced with volunteer soldiers signing up for pay and benefits, instead of just serving as service, like we did in the 70's? ..."
"... There is a difference between IGNORANCE and STUPIDITY. As Ron White said, "YOU CAN'T FIX STUPID". In todays information age, ignorance is a choice. ..."
"... The problem is that we have no "Constitution." That is a fable. The constitution of the separation of powers has been undermined from almost day one. Witness the Alien and Sedition Acts of 1798. ..."
"... Yes sir. Globalization has failed us. The infinite growth paradigm has failed us, as we knew it would. Castro's Cuba, based in a localized agrarian economy, is looking pretty good about now. Localization is the only way back to sustainability. ..."
"... Books? Who said books? You mean reading books? Let me throw a couple out there: I read 'The Image: A Guide To Pseudo-Events In America' last year, it was published 50+ years ago by a very recommended writer and accomplished historian. Boorstin's observations are truer today and even more concerning thanks to our modern, ubiquitous "connectivity". http://www.goodreads.com/book/show/159979.The_Image ..."
"... Adorno famously pointed out in 1940 that the "Mass culture is psychoanalysis in reverse." ..."
"... He doesn't blame the masses because he simply points out the fact that Americans are completely ignorant and blindly believe anything MSM spoon-fed to them. ..."
"... Paul Craig Roberts believe that the people are capable of creating a better and more just society. Instead the people have voted against their own best interest and overwhelmingly believe the propaganda. ..."
"... "... the transformation of government into a criminal enterprise ..." ..."
"... Governments were created by the history of warfare, which was always organized crime developing on larger and larger scales. In the context, the greater problem is that people like Paul Craig Roberts are reactionary revolutionaries, who provide relatively good analysis, followed by bogus "solutions" based upon impossible ideals. ..."
"... The "American People" are the victims of the best scientific brainwashing that money could buy. As Cognitive Dissonance has previously stated on Zero Hedge: "The absolute best controlled opposition is one that doesn't know they are controlled." ..."
"... The article above was another illustration of the ways that the typical reactionary revolutionaries, Black Sheeple, or controlled opposition groups, respond to recognizing the more and more blatant degrees to which there has been an accelerating "transformation of government into a criminal enterprise." THE PROBLEM IS THAT THEY CONTINUE TO STAY WITHIN THE SAME OLD-FASHIONED BULLSHIT-BASED FRAME OF REFERENCE, INSTEAD, AROUND AND AROUND WE GO, STUCK IN THE SAME DEEPENING RUTS, since they do NOT more fully "face the facts" regarding how and why the only realistic solutions to the real problems would require developing better organized crime. INSTEAD, they continue to promote the same dualities based upon false fundamental dichotomies, and the associate bogus "solutions" based upon impossible ideals ... ..."
Jul 25, 2015 | Zero Hedge

Original title: The Eroding Character Of The American People

Paul Craig Roberts

How can the life of such a man
Be in the palm of some fool's hand?
To see him obviously framed
Couldn't help but make me feel ashamed to live in a land
Where justice is a game.-Bob Dylan, "Hurricane"

Attorney John W. Whitehead opens a recent posting on his Rutherford Institute website with these words from a song by Bob Dylan. Why don't all of us feel ashamed? Why only Bob Dylan?

I wonder how many of Bob Dylan's fans understand what he is telling them. American justice has nothing to do with innocence or guilt. It only has to do with the prosecutor's conviction rate, which builds his political career. Considering the gullibility of the American people, American jurors are the last people to whom an innocent defendant should trust his fate. The jury will betray the innocent almost every time.

As Lawrence Stratton and I show in our book (2000, 2008) there is no justice in America. We titled our book, "How the Law Was Lost." It is a description of how the protective features in law that made law a shield of the innocent was transformed over time into a weapon in the hands of the government, a weapon used against the people. The loss of law as a shield occurred prior to 9/11, which "our representative government" used to construct a police state.

The marketing department of our publisher did not appreciate our title and instead came up with "The Tyranny of Good Intentions." We asked what this title meant. The marketing department answered that we showed that the war on crime, which gave us the abuses of RICO, the war on child abusers, which gave us show trials of total innocents that bested Joseph Stalin's show trials of the heroes of the Bolshevik Revolution, and the war on drugs, which gave "Freedom and Democracy America" broken families and by far the highest incarceration rate in the world all resulted from good intentions to combat crime, to combat drugs, and to combat child abuse. The publisher's title apparently succeeded, because 15 years later the book is still in print. It has sold enough copies over these years that, had the sales occurred upon publication would have made the book a "best seller." The book, had it been a best seller, would have gained more attention, and perhaps law schools and bar associations could have used it to hold the police state at bay.

Whitehead documents how hard a not guilty verdict is to come by for an innocent defendant. Even if the falsely accused defendant and his attorney survive the prosecutor's pressure to negotiate a plea bargain and arrive at a trial, they are confronted with jurors who are unable to doubt prosecutors, police, or witnesses paid to lie against the innocent defendant. Jurors even convicted the few survivors of the Clinton regime's assault on the Branch Davidians of Waco, the few who were not gassed, shot, or burned to death by US federal forces. This religious sect was demonized by Washington and the presstitute media as child abusers who were manufacturing automatic weapons while they raped children. The charges proved to be false, like Saddam Hussein's "weapons of mass destruction," and so forth, but only after all of the innocents were dead or in prison.

The question is: why do Americans not only sit silently while the lives of innocents are destroyed, but also actually support the destruction of the lives of innocents? Why do Americans believe "official sources" despite the proven fact that "official sources" lie repeatedly and never tell the truth?

The only conclusion that one can come to is that the American people have failed. We have failed Justice. We have failed Mercy. We have failed the US Constitution. We have failed Truth. We have failed Democracy and representative government. We have failed ourselves and humanity. We have failed the confidence that our Founding Fathers put in us. We have failed God. If we ever had the character that we are told we had, we have obviously lost it. Little, if anything, remains of the "American character."

Was the American character present in the torture prisons of Abu Ghraib, Guantanamo Bay, and hidden CIA torture dungeons where US military and CIA personnel provided photographic evidence of their delight in torturing and abusing prisoners? Official reports have concluded that along with torture went rape, sodomy, and murder. All of this was presided over by American psychologists with Ph.D. degrees.

We see the same inhumanity in the American police who respond to women children, the elderly, the physically and mentally handicapped, with gratuitous violence. For no reason whatsoever, police murder, taser, beat, and abuse US citizens. Every day there are more reports, and despite the reports the violence goes on and on and on. Clearly, the police enjoy inflicting pain and death on citizens whom the police are supposed to serve and protect. There have always been bullies in the police force, but the wanton police violence of our time indicates a complete collapse of the American character.

The failure of the American character has had tremendous and disastrous consequences for ourselves and for the world. At home Americans have a police state in which all Constitutional protections have vanished. Abroad, Iraq and Libya, two formerly prosperous countries, have been destroyed. Libya no longer exists as a country. One million dead Iraqis, four million displaced abroad, hundreds of thousands of orphans and birth defects from the American ordnance, and continuing ongoing violence from factions fighting over the remains. These facts are incontestable. Yet the United States Government claims to have brought "freedom and democracy" to Iraq. "Mission accomplished," declared one of the mass murderers of the 21st century, George W. Bush.

The question is: how can the US government make such an obviously false outrageous claim without being shouted down by the rest of the world and by its own population? Is the answer that good character has disappeared from the world?

Or is the rest of the world too afraid to protest? Washington can force supposedly sovereign countries to acquiesce to its will or be cut off from the international payments mechanism that Washington controls, and/or be sanctioned, and/or be bombed, droned, or invaded, and/or be assassinated or overthrown in a coup. On the entire planet Earth there are only two countries capable of standing up to Washington, Russia and China, and neither wants to stand up if they can avoid it.

For whatever the reasons, not only Americans but most of the world as well accommodate Washington's evil and are thereby complicit in the evil. Those humans with a moral conscience are gradually being positioned by Washington and London as "domestic extremists" who might have to be rounded up and placed in detention centers. Examine the recent statements by General Wesley Clark and British Prime Minister Cameron and remember Janet Napolitano's statement that the Department of Homeland Security has shifted its focus from terrorists to domestic extremists, an undefined and open-ended term.

Americans with good character are being maneuvered into a position of helplessness. As John Whitehead makes clear, the American people cannot even prevent "their police," paid by their tax payments, from murdering 3 Americans each day, and this is only the officially reported murders. The actual account is likely higher.

What Whitehead describes and what I have noticed for many years is that the American people have lost, in addition to their own sense of truth and falsity, any sense of mercy and justice for other peoples. Americans accept no sense of responsibility for the millions of peoples that Washington has exterminated over the past two decades dating back to the second term of Clinton. Every one of the millions of deaths is based on a Washington lie.

When Clinton's Secretary of State, Madeleine Albright, was asked if the Clinton's regime's sanctions, which had claimed the lives of 500,000 Iraqi children, were justified, she obviously expected no outrage from the American people when she replied in the affirmative.

Americans need to face the facts. The loss of character means the loss of liberty and the transformation of government into a criminal enterprise.

benb

The American people have been scientifically mis-educated, propagandized, and beaten down. A disproportionate number of the under 30's are societal DOAs thanks to ... weaponized TV. But I am being too optimistic...

PrayingMantis

... Americans are "intentionally ignorant" of other countries' rights and sovereignty while other countries had been well-informed of America's malicious intents of destroying other countries' rights and sovereignty ...

BarnacleBill

No, I don't think Americans are intentionally ignorant, any more than other nationalities. What they are tribal. Tribal peoples don't care whether their policies are right or wrong; they are instinctively loyal to them and to those who formulate them.

Also, I have to say that I believe the US empire is a long, long, way from collapse. It is still expanding, for goodness sake. Empires collapse only when the shrinking process is well under way. (The recent Soviet Empire was exceptional, in this regard.) It will take several more generations before the darkness lifts, I'm afraid.

macholatte

The only conclusion that one can come to is that the American people have failed.

It's now official, PCR is a complete dipshit.

Hey Paul, how about you get your head out of the clouds and stop looking down your nose at everyone long enough to read a couple of books about brainwashing and then get back to us. Maybe you start with this: http://edward-bernays.soup.io/post/19658768/Edward-Bernays-Propaganda-19...

"The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. ...We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. ...In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons...who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind."
-- Edward L. Bernays, Propaganda

OldPhart

"Americans need to face the facts. The loss of character means the loss of liberty and the transformation of government into a criminal enterprise."

I think that happened August 13, 1971, but didn't get fully organized (as in Mafia) until 2000.

PT

The majority have their nose to the grind stone and as such can not see past the grind stone. They rely on "official sources" to put the rest of the world in order for them, but have no time to audit the "official sources". Would public education suffer if mothers and fathers were monitoring what the children were learning? But who has got time for that when both parents are working? How many non-work organizations were your parents and grand-parents involved in (both the wage-earner and the housekeeper)? How many organizations are you involved in?

Do you constantly hassle your local politicians or do you just say, "I'll vote 'em out in four years time"? (Yes, I know, you just don't vote. Fair enough, this question is for the voters.)

Yes, some of us are guilty of not fighting back. We had "Shut up and do as you're told" and "Well, if you're not happy with what you've got then work harder" beaten into us. Some of us are a little awake because, despite all our efforts, the grind stone was removed from us and then we got to see the larger picture of what lies behind the grind stone. Others are still busy, nose to the wheel, and all they see is the wheel.

And that is before we even consider HypnoToad on the Idiot Box. Some "need" the idiot box to help them wind down. Some can no longer enjoy the silence. (Remember Brave New World? It's true. Many people can no longer stand to be around silence, with nothing but their own thoughts.) I tell everyone that TV is crap. Radio is crap. Newspapers are crap. Turn that shit off for six months to a year, then go back to it and see what you really think of it. But they can't handle the thought of being away from "the background noise".

Ever spoken to grandparents who remember wars and depressions? And even amongst the rations and the hardships they still find positive memories? Time to talk to them again. Or not. I guess we'll get first-hand experience soon enough.

AlaricBalth

Allow me for a moment to share a brief anecdote about the new "American Character".

Last Sunday I was at the local supermarket. I was at the bakery counter, when suddenly a nicely dressed, Sunday best, non-Caucasian woman barrels into my cart riding a fat scooter. She rudely demands from the counter person a single cinnamon bun and then wheels off towards the front. Curious, I follow her up the aisle as she scarfs down the pastry in three bites. She then proceeds to stuff the empty bag between some soda bottles and scooters through the checkout without paying for her item. In the parking lot she then disembarks from her scooter, easily lifts it into the trunk of her Cadillac and walks to the drivers side, gets in and speeds off with her kids, who were in the back seat.

Amazed at what I had just witnessed, I went back into the store, retrieved the empty bag, included it in my few items at checkout and then went to the manager to share this story with him. He laughed and said there was nothing he could do.

The new "American Character" is that of a sense of entitlement and apathy.
I weep for the future.

Headbanger

Having character is not politically correct. Plus there's no need to develop character anymore because there's no jobs requiring any!

Consumption is the ONLY value of the inDUHvidual today.

And the less character they have, the more shit they'll consume to feel fulfilled cause they can't get that from themselves.

clymer Sat, 07/25/2015 - 07:34

Macholatte, i don't think PCR is writing from a point of view that is haughty and contemptful of the American people, per se, but rather from a perspective that is hopeless and thoroughly depressed after contemplating what the American people of many generations ago has taken for themselves as natural rights from a tyrranical government, only to see the nation slowly morph into something even worse than what was rejected by the founders.

"A nation can survive its fools and even the ambitious. But it cannot survive treason from within...
He rots the soul of a nation; he works secretly and unknown in the night to undermine the pillars of a city; he infects the body politic so that it can no longer resist."

ThroxxOfVron

"The loss of character means the loss of liberty and the transformation of government into a criminal enterprise. "

"I think that happened August 13, 1971 "

The entirety of the Western Hemisphere, not just 'The United States', was seized by invaders from Europe.

It is not an 'American' disease: it is a European disease and always was.

The indiginous populations of the Western Hemisphere were suystemaically and with forethought expropriated, ensalved, and slaughtered. The indiginous persons that dwelled within the geographical domain that presently comprise the USA were still being margialized, forcibly relocated, and murdered, long after the so-called 'American Civil War' had been decided.

...& As much as it is fashionable and/or politically expedient to vilify and blame the 'white' Europeans both for this history and extenuate that history to inform the present state of affairs, the Dutch, the French, the Portuguese, and the Spanish ( most eggregiously IMHO) were brutal and savage.

Look at the demographics of the Western Hemisphere.

If you have a shred of honesty you just can't hang the blame on 'whites', put it on a bumper sticker or a #shittyhashtagmeme and go back to fucking off.

The disgusting fraud of Manifest Destiny was a fig leaf to hide the enormity of these crimes; but, they are most obviously European crimes.

...& has Europe changed since the West was settled? Did Europeans even stop their warring amonsgst themselves?

See for yourself: https://en.wikipedia.org/wiki/List_of_conflicts_in_Europe

That would be: Hell NO.

Neither in Europe itself, nor in the settled West.

The Pacific Ocean wasn't named for calm waters.

It was named thusly because it is the natural geographic boundary where the mayhem and brutality and genocide ceased, if only because the greedy and ruthless Europeans had run out of land in the Western Hemisphere with people upon it to plunder and murder...

El Vaquero

The US will collapse within the next decade if some serious new technology is not developed and the infrastructure to use it is put in. There is too much debt and not enough material resources to continue growing the ponzi scheme that is our monetary system at an exponential rate without something breaking. The question is, will it be at the end of this boom-bust cycle, or the next? And if you look at what is being done on the financial front, which is the backbone of our neo-empire, that is shrinking.

The USD is slowly falling out of favor. There will come a point where that rapidly accelerates. We've been in a state of collapse for 15 years.


Abitdodgie

ignorance is choice these days and Americans love it.

AetosAeros

Not only a choice, but the ONLY choice they are prepared to accept. Cognitive Dissonance at it's finest. And to make matters worse, in only the best American fashion, we've asked if if it can be Supersized to go along with the Freedom Lies we feed ourselves.

I've seen the enemy, and....

But only if I'm willing to look in the mirror. Today's American doesn't look for what's right there in front of him/her, we look for all the new 'Social Norms' that we aren't living up to. This article is completely on target, and I hope Roberts hasn't decided to do any remodeling, cause too many idle nails guns make for a great Evening News sidebar mention.

Damnit all to hell.

Fun Facts

Fun Facts's picture

Rubicon727

We educators began seeing this shift towards "me-ism" around 1995-6. Students from low to middle income families became either apathetic towards "education" or followed their parent's sense of "entitlement." Simultaneously, the tech age captured both population's attention. Respecting "an education" dwindled.

Fast forward to the present: following the 2007-8 crash, we noted clear divisions between low income vs middle/upper class students based on their school behavior. Low to slightly middle income students brought to school family tensions and the turmoil of parents losing their jobs. A rise in non-functioning students increase for teachers while the few well performing students decline significantly.

Significant societal, financial shifts in America can always be observed in the student population.

reader2010

Mission Accomplished.

"When a population becomes distracted by trivia, when cultural life is redefined as a perpetual round of entertainments, when serious public conversation becomes a form of baby-talk, when, in short, a people become an audience and their public business a vaudeville act, then a nation finds itself at risk; a culture-death is a clear possibility."

- Neil Postman, Amusing Ourselves to Death: Public Discourse in the Age of Show Business, 1985

Lea

"The American people have been scientifically mis-educated".

You've got the answer there. The education system is the root cause of the problem. I'm from Europe, but if I've understood correctly, the US education policy is to teach as little as possible to children, and expect them to fill in the gaps in the Universities, past a certain age.

Only, it can't work. Children WILL learn, as childhood is the time when most informations are stored. If the schools don't provide the knowledge, they will get it from the television, movies or games, with the consequences we can see: ignorance, obsession with TV and movies stars, inability to differentiate life from movies, and over-simplistic reasoning (if any).

In Europe, we knew full well children learn fast and a lot, and that was why the schools focused on teaching them as much general knowldge as possible before 18 years old, which is when - it is scientifically proved - the human brain learns best.

Recently, the EU leading countries have understood that having educated masses doesn't pay if you want to lead them like sheep, so they are perfidiously trying to lower the standards... to the dismay of parents.

My advice, if I may presume to give any, would be to you USA people: teach your children what they won't learn at school, history, geography, literature (US, European and even Asian, why not), a foreign language if you can, arts, music, etc; and keep them away from the TV, movies and games.

And please adapt what you teach them to their age.

Refuse-Resist

Bang on! One anecdotal example: insisting that all 3rd graders use calculators "to learn" their multiplication tables. If I didn't do flashcards at home with my kids they wouldn't know them. As somebody who majored in engineering and took many many advanced math courses, I always felt that knowing your 'times tables' was essential to being successful in math.

What better way to dumb down otherwise intelligent children by creating a situation where the kid can't divide 32 by 4 without a calculator. Trigonometry? Calculus? Linear Algebra? Fuggedaboudit.

doctor10

The CB's and MIC have Americans right where they want them. the consequences of 3-4 generations of force feeding Santa Claus and the Easter Bunny

ThroxxOfVron

Some of US were never fucking asleep. Some of us were born with our eyes and minds open. We were, and are: hated, and reviled, and marginalized, and disowned for it. The intellectual repression was, and is, fucking insane and brutal. Words such as ethics and logic exist for what purpose? What are these expressions of? A bygone time? Abstractions?

Those that have tried to preserve their self awareness, empathy, and rationality have been ruthlessly systematically demeaned and condemed for confronting our families, our culture and institutions. We all have a right to be angry and disgusted and distrustful of the people and institutions around us. I am very fucking angry, and disgusted, and distrustful of the people and institutions around me.

But I still have hope. Nothing lasts forever.. This self-righteous nation called The United States, this twisted fraud of a culture called America, is most dangerously overdue for receipt of chastisment and retribution. It would be best if the citizenry of the United States taught themselves a lesson in stead of inviting Other nations and cultures to educate them.

A serious self education may be tedious and imperfect; but, it would be far far cheaper than forcing someone to come all the way over those oceans to educate Americans at the price they will be demanding for those lessons...

I do not require representation. I will speak my own mind and act of my own accord.

Every time other so-called Americans take a shit on me for thinking and speaking and acting differently it is a badge of honor and a confirmation of my spiritual and intellectual liberty. They don't know it but they are all gonna run out of shit before I run out of being free.

ThroxxOfVron

"The loss of character means the loss of liberty and the transformation of government into a criminal enterprise. "

"I think that happened August 13, 1971 "

The entirety of the Western Hemisphere, not just 'The United States', was seized by invaders from Europe. It is not an 'American' disease: it is a European disease and always was.

The indiginous populations of the Western Hemisphere were suystemaically and with forethought expropriated, ensalved, and slaughtered. The indiginous persons that dwelled within the geographical domain that presently comprise the USA were still being margialized, forcibly relocated, and murdered, long after the so-called 'American Civil War' had been decided.

...& As much as it is fashionable and/or politically expedient to vilify and blame the 'white' Europeans both for this history and extenuate that history to inform the present state of affairs, the Dutch, the French, the Portuguese, and the Spanish ( most eggregiously IMHO) were brutal and savage.

Look at the demographics of the Western Hemisphere. If you have a shred of honesty you just can't hang the blame on 'whites', put it on a bumper sticker or a #shittyhashtagmeme and go back to fucking off. The disgusting fraud of Manifest Destiny was a fig leaf to hide the enormity of these crimes; but, they are most obviously European crimes....& has Europe changed since the West was settled? Did Europeans even stop their warring amongst themselves?

See for yourself: https://en.wikipedia.org/wiki/List_of_conflicts_in_Europe

That would be: Hell NO. Neither in Europe itself, nor in the settled West. The Pacific Ocean wasn't named for calm waters. It was named thusly because it is the natural geographic boundary where the mayhem and brutality and genocide ceased, if only because the greedy and ruthless Europeans had run out of land in the Western Hemisphere with people upon it to plunder and murder...

Mini-Me

"The loss of character means the loss of liberty and the transformation of government into a criminal enterprise."

I agree with the first part. As for the latter, "government," by definition, is a criminal enterprise. It doesn't start out pure as the driven snow and then change into something nefarious over time. Its very essence requires the initiation of violence or its threat. Government without the gun in the ribs is a contradiction.

The fact that those in power got more votes than the losing criminals does not magically morph these people into paragons of virtue. They are almost without exception thoroughly deranged human beings. Lying is second nature to them. Looting is part of the job description. Killing is an end to their means: the acquisition and aggrandizement of power over others, no matter how much death and destruction results.

These people are sick bastards. To expect something virtuous from them after an endless string of wanton slaughter, theft and abuse, is simply wishful thinking.

Jack Burton

I agree with Paul Craig Roberts. He asks "Why" and "How." Well, Paul, here is my answer. Decades of Public Education and over 50 years of mass media monopoly. In an age where FOX is the top rated News station and CNN is considered liberal? Where kids in Public school are offered Chocolate milk and frozen pizza for school breakfast before going to class rooms with 30-40 kids. When Texas political appointees chose school text book content for the nation? A nation where service has ended, replaced with volunteer soldiers signing up for pay and benefits, instead of just serving as service, like we did in the 70's?

Paul Craig Roberts points out the police war against the people. That comes right from the very top, orders filter down to street cops. Street Cops are recruited from groups of young men our fathers generation would have labeled mental! But now they are hired across the board, shaved heads, tatoos, and a code of silence and Cops Above Justice.

The people have allowed the elites to rule in their place, never bothering to question the two fake candidates we are allowed to vote for.

Jtrillian

There is a difference between IGNORANCE and STUPIDITY. As Ron White said, "YOU CAN'T FIX STUPID". In todays information age, ignorance is a choice.

Part of the problem that no one is talking about or addressing is the population explosion. And it's not linear. Those who are the least educated, fully dependent others for their survival (welfare), the most complacent, and often with violent criminal records are breeding the fastest.

Evolution is not guaranteed. It can be argued that the apathy we experience today is a sign of the human race de-evolving. It takes a certain amount of cognitive ability to observe and question what is going on.

Further, the society we have created where "60 is the new 40" creates very little time to pay attention to what is going on in the world. Many people rely on mainstream media which is not really news any more. When six corporations control more than 90% of the news, it's the message of the corporate elite that we are fed. This becomes painfully obvious when you start turning to other sources for information like social media and independent news. Mainstream media today is full of opinion bias - injecting opinion as though it were fact. They also appeal to the lowest commmon denominator by focusing on emotionally charged topics and words rather than boring facts. Finally, the mainstream media is extremely guilty of propaganda by omission, ignoring important events altogether or only presenting one side of the story as is being done with regard to ISIS, Syria, and Ukraine today. People who watch the mainstream media have no idea that the US played a significant role in arming ISIS and aided in their rise to power. They have no idea that it was likely ISIS that used chemical weapons in Syria. They have no idea that the US has propped up real life neo nazis in high government positions in Ukraine. And they have ignored the continuing Fukushima disaster that is STILL dumping millions of gallons of radioactive water into the ocean every single day.

To sum up, democracies only work when people pay attention and participate. People are either too stupid, too overworked, are are looking to the wrong sources for information.

Until we break up mainstream media, remove incentives for those who cannot even care for themselves to stop breeding, and make fundamental changes to our society that affords people the time to focus on what is happening in the world, it will only get worse.

Much worse.

serotonindumptruck

A dying empire is like a wounded, cornered animal.

It will lash out uncontrollably and without remorse in a futile effort to save itself from certain death.

Enough Already

The problem is that we have no "Constitution." That is a fable. The constitution of the separation of powers has been undermined from almost day one. Witness the Alien and Sedition Acts of 1798.

In the centuries since then, there has been no "separation of powers." Marbury v Madison (1803) gave the Supreme Court the right to "decide" what the "law" was. Although, only in the 20th century did the "Supreme" court really start "legislating" from the bench.

We're just peons to the Overall Federal Power; the three "separate" parts of the federal government have been in collusion from the first. But like all empires, this one is in the final stage of collapse; it has just gotten too big.

gswifty

Yes sir. Globalization has failed us. The infinite growth paradigm has failed us, as we knew it would. Castro's Cuba, based in a localized agrarian economy, is looking pretty good about now. Localization is the only way back to sustainability.

napples

Books? Who said books? You mean reading books? Let me throw a couple out there: I read 'The Image: A Guide To Pseudo-Events In America' last year, it was published 50+ years ago by a very recommended writer and accomplished historian. Boorstin's observations are truer today and even more concerning thanks to our modern, ubiquitous "connectivity". http://www.goodreads.com/book/show/159979.The_Image

Another by Boorstin, The Discoverers was my fav, like Bryson's 'Short History' on steroids:

https://en.wikipedia.org/wiki/Daniel_J._Boorstin

I'm currently trying to fathom all of the historical implications of the claims Menzies is making in his book '1434', where apparently everything I learned about history is a lie. While he's making a lot of claims(hoping some sticks?) I'm not truly convinced. It is a very good, believable thought experiment. It almost makes perfect sense given the anglo/euro history of deceit & dishonesty, but I digress:
https://en.wikipedia.org/wiki/Gavin_Menzies

This one took a long time to grok, Dr Mandelbrot tried to warn us:
http://www.goodreads.com/book/show/665134.The_Mis_Behavior_of_Markets#

Benoit's friend & protege tried to warn us too:
https://en.wikipedia.org/wiki/The_Black_Swan_%282007_book%29

Put them together and you get the financial meltdown's 'Don't say we didn't warn you' manifesto from 2006(not a book, but a compelling read):
http://www.ft.com/cms/s/2/5372968a-ba82-11da-980d-0000779e2340.html

OK, I'm tired. Time to unplug.

reader2010

Adorno famously pointed out in 1940 that the "Mass culture is psychoanalysis in reverse." It takes 75 years for someone such as PCR to reiterate. He doesn't blame the masses because he simply points out the fact that Americans are completely ignorant and blindly believe anything MSM spoon-fed to them.

George Orwell once remarked that the average person today is about as naive as was the average person in the Middle Ages. In the Middle Ages people believed in the authority of their religion, no matter what. Today, we believe in the authority of what Adorno called Culture Industry and MSM, no matter what. Today we are indeed in another Dark Age

PoasterToaster

"Americans" are not one person. Individuals are not fungible. Reasoning from the "average American" leads to false conclusions.

reader2010

Jacques Derrida says, "The individualism of technological civilization relies precisely on a misunderstanding of the unique self. It is the individualism of a role and not of a person. In other words it might be called the individualism of a masque or persona, a character [personnage] and not a person." There are many Americans but they all play the same role in the Pursuit of Happiness, aka wage slaves, career slaves, debt slaves, information junkies, and passive consumers.

Moccasin

Paul Craig Roberts believe that the people are capable of creating a better and more just society. Instead the people have voted against their own best interest and overwhelmingly believe the propaganda.

When do the people or the society take responsibility for its greater good or own the crimes of those they put into power?

Blaming the aristocracy or the oligarchs seems like a scapegoat when the people have never stood up to the corruption in a cohesive or concerted way. imho, After a few generations of abuse and corruption the people need to take responsibility for their future. I expect that most will just buy into the charade and live the lie, on that basis as a society we are doomed to live in a corporatocracy fascist state.

Aldous Huxley called it a scientific dictatorship, Edward Bernays referred to us as a herd.

Moccasin

In the USA being white, monied and having the capacity to afford a good education is privileged. To his credit he speaks to the greater population, the 'average citizen' and not the plutocratic class.

MSorciere

What we have is the result of conditioning and commoditizing a population. The country is filled with consumers, not citizens. Teach the acquisition of money and goods as the main goal and individualism as the only acceptable social unit. We end up with a nation of insatiable sociopaths, ruled by power-hungry psychopaths.

Divisive politics, jackbooted authority from the DC scumpond down to the cop on the beat, the constant preaching of the cult of the individual as a sustitute for true liberty... all of these have served to destroy a sense of community and decentness between Americans.

The ONLY thing that could threaten the ruling class is a banding together of the people - in large numbers. 'They' have purposefully and effectively quashed that.

TrulyStupid

Shifting responsibility to the usual suspects is simply a manifestation of the American moral collapse. Man up and do some self evaluation.

T-NUTZ

"what I have noticed for many years is that the American people have lost, in addition to their own sense of truth and falsity, any sense of mercy and justice for other peoples"

Unfortunately, Paul, the American people have lost any sense of mercy and justice for their own people.

https://www.youtube.com/watch?v=DXRDq9nKJ0U

Phillyguy

Painful as it may be, we need to rationally look at US history/society. The nascent US was formed by stealing land from the native population and using human capital (read African Slaves) to generate wealth (it took a civil war with circa 500K casualties to stop this- one could argue the US "civil war" never ended). More recently, the US has been almost continuously at war since 1940, we dropped atomic bombs on Japan. Currently, the US/NATO war theater extends from the Levant, to Caspian Basin, Persian Gulf, China Sea, Indian Ocean, Horn of Africa (Saudi/US war on Yemen), the Maghreb and E Europe and Russian Border.

Radical Marijuana

"... the transformation of government into a criminal enterprise ..."

Governments were created by the history of warfare, which was always organized crime developing on larger and larger scales. In the context, the greater problem is that people like Paul Craig Roberts are reactionary revolutionaries, who provide relatively good analysis, followed by bogus "solutions" based upon impossible ideals.

The "American People" are the victims of the best scientific brainwashing that money could buy. As Cognitive Dissonance has previously stated on Zero Hedge: "The absolute best controlled opposition is one that doesn't know they are controlled."

It is practically impossible to exaggerate the degree to which that is so, on such profound levels, because of the ways that most people want to continue to believe that false fundamental dichotomies and impossible ideals are valid, and should be applied to their problems, despite that those mistaken ideas cause the opposite to happen in the real world, because those who promote those kinds of false fundamental dichotomies and their related impossible ideals, ARE "controlled opposition."

Rather, the place to begin would be by recognizing that all human beings and civilizations must necessarily operate as entropic pumps of energy flows, which necessarily are systems of organized lies operating robberies. Everyone has some power to rob, and power to kill to back that up. Governments assembled and channeled those powers. There was never a time when governments were not organized crime. There could never be any time when governments were not organized crime. The only things that exist are the dynamic equilibria between different systems of organized lies operating robberies. Those dynamic equilibria have become extremely unbalanced due the degree that the best organized gangs of criminals were able to control their opposition.

Paul Craig Roberts, as well as pretty well all of the rest of the content published on Zero Hedge, are presentations of various kinds of controlled opposition groups, most of which do not recognize that they are being controlled by the language that they use, and the philosophy of science that they take for granted. THAT is the greatest failure of the American People, as well as most of the rest of the people everywhere else. They believe in false fundamental dichotomies, and the related impossible ideals, and therefore, their bogus "solutions" always necessarily backfire badly, and cause the opposite to happen in the real world.

After all, the overwhelming vast majority of the American People operate as the controlled opposition to the best organized gangs of criminals that most control the government of the USA. Therefore, the FAILURES of the American People are far more profound and problematic than what is superficially presented by guys like Paul Craig Roberts, and also, of course, his suggested bogus "solutions" are similarly superficial.

The ONLY things which can actually exist are the dynamic equilibrium between different systems of organized lies operating robberies. The degree to which the American People, as well as most of the rest of the people in the world, FAIL to understand that is the degree to which they enable the best organized gangs of criminals to control them, due to the vast majority of people being members of various controlled opposition groups. Controlled opposition always presents relatively superficial analysis of the political problems, which are superficially correct. However, they then follow that up with similarly superficial "solutions." Therefore, magical words are bandied about, that express their dualities, through false fundamental dichotomies, and the related impossible ideals.

Governments must exist because organized crime must exist. Better governments could be achieved through better organized crime. However, mostly what get presented in the public places are the utter bullshit of the biggest bullies, who dominate the society because they were the best organized gangs of criminals, who were also able to dominate their apparent opposition. Therefore, instead of more realistic, better balancing of the dynamic equilibria between different systems of organized lies operating robberies, we get runaway developments of the best organized gangs of criminals being able to control governments, whose only apparent opposition is controlled to stay within the same bullshit frame of reference regarding everything that was actually happening.

The mainline of the FAILURES of the American People have been the ways that the international bankers were able to recapture control over the American public "money" supply. After that, everything else was leveraged up, through the funding of the political processes, schools, and mass media, etc., being more and more dominated by that fundamentally fraudulent financial accounting system. Of course, that FAILURE has now become more than 99% ... Therefore, no political possible ways appear to exist to pull out of that flaming spiral nose dive, since we have already gone beyond the event horizon into that social black hole.

Most of the content on Zero Hedge which is based upon recognizing that set of problems still acts as controlled opposition in that regard too. Therefore, the bogus "solutions" here continue to deliberately ignore that money is necessarily measurement backed by murder. Instead of accepting that, the controlled opposition groups like to promote various kinds of "monetary reforms." However, meanwhile, we are actually already headed towards the established debt slavery systems having generated debt insanities, which are going to provoke death insanities.

In that context, the only realistic resolutions to the real problems would necessarily have to be monetary revolutions, that may emerge out of the future situations, after the runaway debt insanities have provoked death insanities. Indeed, the only genuine solutions to the problems are to develop different death control systems, to back up different debt control systems, which must necessarily be done within the context that governments are the biggest forms of organized crime, controlled by the best organized gangs of criminals.

The various controlled opposition groups do not want to face those social facts. Rather, they continue to want to believe in the dualities expressed as false fundamental dichotomies and the related impossible ideals, which is their greatest overall FAILURE. In my view, the article above by Roberts contained a lot of nostalgic nonsense. There was never a time when there were any governments which were not based on the applications of the principles and methods of organized crime, and there could never be any time in the future when that could be stopped from being the case.

The greatest FAILURE of the American People, as well as most of the rest of the world's people, has been to become so brainwashed to believe in the biggest bullies' bullshit world view, that there is no significant opposition that is not controlled by thinking inside of the box of that bullshit. The government did NOT transform into a criminal enterprise. The government was necessarily ALWAYS a criminal enterprise. That criminal enterprise has become more and more severely UNBALANCED due to the FAILURE of the people to understand that they were actually members of an organized crime gang, called their country. Instead, they were more and more scientifically brainwashed to believe in bullshit about everything, including their country.

The ONLY connection between human laws and the laws of nature is the ability to back up lies with violence. The development of the government of the USA has been the developed of integrated systems of legalized lies, backed by legalized violence. Those systems of ENFORCED FRAUDS have been able to become more extremely unbalanced because there is almost nothing which is publicly significant surrounding that core of organized crime but various controlled opposition groups.

Of course, it seems politically impossible for my recommendations to actually happen within the foreseeable future, as the current systems of debt slavery drive through debt insanities to become death insanities, but nevertheless, the only theoretically valid ideas to raise to respond to the real problems would have to based upon a series of intellectual scientific revolutions. However, since we have apparently run out of time to go through those sorts of paradigm shifts sufficiently, we are stuck in the deepening ruts of political problems which guys like Roberts correctly present to be the case

... HOWEVER, ROBERTS, LIKE ALMOST EVERYONE ELSE, CONTINUE TO PRESUME UPON DUALITIES, AND THEREFORE, HAVE THEIR MECHANISMS REGARDING "SOLUTIONS" ABSURDLY BACKWARDS.

Rather, we should start with the concept of SUBTRACTION, which then leads to robbery. We should start with the recognition that governments are necessarily, by definition, the biggest forms of organized crime. Governments did NOT transform into being that. Governments were always that. The political problems we have now are due to the best organized gangs of criminals, which currently are primarily the biggest gangsters, which can rightly be referred to as the banksters, having dominated all aspects of the funding of politics, enough to capture control over all sociopolitical institutions, so that the American People would more and more be subjected to the best scientific brainwashing that money could buy, which was built on top of thousands of years of previous history of Neolithic Civilizations being based on backing up lies with violence.

The runaway systems of ENFORCED FRAUDS, or the integrated systems of legalized lies, backed by legalized violence, that more and more dominate the lives of the American People are due to the applications of the methods of organized crime, and could not be effectively counter-balanced in any other ways. However, the standing social situation is that there is no publicly significant opposition that is not controlled to stay within the same frame of reference of the biggest bullies, which is now primarily the frame of reference of the banksters. Indeed, to the degree to which people's lives are controlled by the monetary system, they are debt slaves. Moreover, the degree to which they do not understand, and do not want to understand, that money is necessarily measurement backed by murder, then they think like controlled opposition groups, who have their mechanisms absurdly backwards, when they turn from their superficial analysis of what the political problems, to then promote their superficial solutions of those problems.

I AGREE that "Americans need to face the facts." However, those facts are that citizens are members of an organized crime gang, called their country. "Their" country is currently controlled by the best organized gangs of criminals. However, there are no genuine resolutions for those problems other than to develop better organized crime. Since the controlled opposition groups that are publicly significant do not admit any of the deeper levels of the scientific facts regarding human beings and civilizations operating as entropic pumps of energy flows, but rather, continue to perceive all of that in the most absurdly backward ways possible, the current dynamic equilibria between the different systems of organized lies operating robberies continue to become more and more extremely UNBALANCED.

In the case of the article above, Roberts does NOT "face the facts" that governments were always forms of organized crime, and must necessarily be so, because human beings must live as entropic pumps of energy flows. Rather, Roberts tends to illustrate how the controlled opposition takes for granted certain magical words and phrases, such as "Liberty" or "Constitution," that have no adequate operational definitions to connect them to the material world.

We are living inside of an oxymoronic scientific dictatorship, which has applied the progress in science primarily to become better at backing up lies with violence, while refusing to allow scientific methods to admit and address how and why that has been what has actually happened. Therefore, almost all of the language that we use to communicate, as well as almost all of the philosophy of science that we take for granted, was based on the biggest bullies' bullshit, which is now primarily manifested as the banksters' bullshit, as that bullshit developed in America to become ENFORCED FRAUDS.

ALL of the various churches, corporations, and countries are necessarily various systems of organized lies operating robberies. Those which are the biggest now were historically the ones that were the best at doing that. The INTENSE PARADOXES are due to human systems necessarily being organized lies operating robberies, wherein the greatest social successfulness has been achieved by those who were the best professional liars and immaculate hypocrites. That flows throughout ALL of the established systems, which are a core of organized crime, surrounded by controlled opposition groups.

The degree to which the American People, as well as the rest of the world's people, have been more and more scientifically brainwashed to believe in bullshit about governments in particular, and human beings and civilizations in general, is the degree to which the established systems based upon ENFORCED FRAUDS are headed towards some series of psychotic breakdowns. For all practical purposes, it is politically impossible to get enough people to stop acting like incompetent political idiots, and instead start acting more like competent citizens, because they do not understand, and moreover have been conditioned to not want to understand that governments are necessarily organized crime.

Roberts ironically illustrated the deeper nature of the political problems that he also shares, when he perceives that governments have somehow transformed into being criminal enterprise, when governments were always necessarily criminal enterprises. Similarly, with those who recognize that, but then promote the impossible solutions based upon somehow stopping that from being the case, which is as absurdly backwards as stopping human beings from operating as entropic pumps of energy flows, which then also presumes that it would be possible to stop human civilizations from being entropic pumps of energy flows.

Rather, the deeper sorts of intellectual scientific revolutions that we should go through require becoming much more critical of the language that we use to communicate with, and more critical about the philosophy of science that we presumed was correct. Actually, we were collectively brainwashed to believe in the biggest bullies' bullshit, which is as absurdly backwards as it could possibly be. However, due to the collective FAILURES of people to understand that, as reflected by the ways that the core of organized crime is surrounded by nothing which is publicly significant than layers of controlled opposition, there are no reasonable ways to doubt that the established debt slavery systems will continue to drive even worse debt insanities, which will provoke much worse death insanities. Therefore, to be more realistic about the foreseeable future, the development of new death control systems will emerge out of the context of crazy collapses into chaos, wherein the runaway death insanities provide the possible opportunities for new death controls to emerge out of that situation.

Of course, the about 99% FAILURE of the American People to want to understand anything that I have outlined above indicates that the foreseeable future for subsequent generations shall not too likely be catalyzed transformations towards enough people better understanding their political problems, in order to better resolve those problems. Rather, what I mostly expect is for the psychotic breakdowns of the previous systems of ENFORCED FRAUDS to give opportunities to some possible groups of controlled opposition to take advantage of that, to perhaps emerge as the new version of professional liars and immaculate hypocrites, who will be able to operate some new version of organized lies, operating robberies, who may mostly still get away with being some modified versions of still oxymoronic scientific dictatorship, due to social success still being based upon the best available professional liars and immaculate hypocrites, who were able to survive through those transformations, so that the new systems arise from some of the seeds of the old systems.

At the present time, it is extremely difficult to imagine how the human species could possibly reconcile progress in physical science by surpassing that with progress in political science. Rather, what mostly exists now is the core of organized crime, which gets away with spouting the bullshit about itself, such as how the banksters dominate the mass media, and the lives of everyone else who depend upon the established monetary system (which is dominated by the current ways that governments ENFORCE FRAUDS by privately controlled banks), while that core of organized crime has no publicly significant opposition that is not controlled by the ways that they think, which ways stay within the basic bullshit world view, as promoted by the biggest bullies for thousands of years, and as more and more scientifically promoted to brainwash the vast majority of people to believe in that kind of bullshit so completely that it mostly does not occur to them that they are doing that, and certainly almost never occurs to them that they are doing that in the most profoundly absurd and backward ways possible.

That is how and why it is possible for an author like Roberts to correctly point out the ways in which the government of the USA is transforming into being more blatantly based on organized crime ... HOWEVER, Roberts is not willing and able to go through deeper levels of intellectual scientific revolutions, in order to recognize how and why governments were always necessarily manifestations of organized crime. Therefore, as is typically the case, Roberts does not recognize how ironically he recommends that Americans should "face the facts," while he himself does not fully do so.

The whole history of Neolithic Civilizations was social pyramid systems based on being able to back up lies with violence, becoming more sophisticated systems of legalized lies, backed by legalized violence, which currently manifest as the globalized electronic frauds of the banksters, were are backed up by the governments (that those banksters effectively control) having atomic bombs. Those are the astronomically amplified magnitudes of the currently existing combined money/murder systems. Therefore, it appears to be politically impossible at the present time to develop better governments, due to the degree that almost everyone is either a member of the core groups of organized crime, or members of the surrounding layers of groups of controlled opposition, both of which want to stay within the same overall bullshit frame of reference, because, so far, their lives have been socially successful by being professional liars and immaculate hypocrites.

Ironically, I doubt that someone like Roberts, or pretty well everyone else whose material is published on Zero Hedge is able and willing to recognize the degree to which they are actually controlled opposition. Indeed, even more ironically, as I have repeated before, even Cognitive Dissonance, when he previously stated on Zero Hedge: "The absolute best controlled opposition is one that doesn't know they are controlled." DOES NOT "GET IT" regarding the degree to which he too is controlled opposition, even while superficially attempting to recognize and struggle with that situation. (Indeed, of course, that includes me too, since I am still communicating using the English language, which was the natural language that most developed to express the biggest bullies' bullshit world view.)

Overall, I REPEAT, the deeper problems are due to progress in physical science, NOT being surpassed by progress in political science. Instead, while there EXIST globalized electronic frauds, backed by atomic bombs, practically nothing regarding the ways of thinking that made that science and those technologies possible has found any significant expression through political science, because political science would have to go through even more profound paradigm shifts within itself in order to do that.

The INTENSE PARADOXES continue to be the manifestation of the oxymoronic scientific dictatorship, that deliberately refuses to become any more genuinely scientific about itself. Therefore, the banksters have been able to pay for the best scientific brainwashing that money could buy, for generation after generation, in order to more and more brainwash most of the American People to believe in the banksters' bullshit world view. While there exist electronic frauds, backed by atomic bombs, practically nothing regarding the physical science paradigm shifts that made that possible have even the slightest degree of public appreciation within the realms of politics today, which are almost totally dominated by the biggest bullies' bullshit world view, despite that being as absurdly backwards as possible, while the controlled opposition groups, mostly in the form of old-fashioned religions and ideologies, continue to stay within that same bullshit world view, and adamantly refuse to change their perceptual paradigms regarding political problems.

However, I REPEAT, the issues we face are NOT that governments have transformed to become criminal enterprises, but that governments were always necessarily criminal enterprises, which had the power to legalized their own lies, and then back those lies up with legalized violence. Thereby, the best organized criminals, the international bankers, as the biggest gangsters, or the banksters, were able to apply the methods of organized crime through the political processes. Meanwhile, the only "opposition" that was allowed to be publicly significant was controlled, to basically stay within the same bullshit world view, which is what Roberts has done in his series of articles, as well as what is almost always presented in the content published on Zero Hedge.

The NEXT LEVEL of "the need to face the facts" is to recognize that the political economy is based upon ENFORCED FRAUDS, or systems of debt slavery backed by wars based on deceits. However, the NEXT LEVEL "the need to face the facts" is the that the only possible changes are to change the dynamic equilibria between the different systems of organized lies operating robberies, i.e., change those ENFORCED FRAUDS, in ways which CAN NOT STOP THOSE FROM STILL BEING ENFORCED FRAUDS, because of the degree to which money is necessarily measurement backed by murder.

For the American People, as well as the rest of the world's people, to stop being such dismal FAILURES would require them to become more competent citizens. However, at the present time they appear to be totally unable to do that, because they are unwilling to go through the profound paradigm shifts that it would take them to become more competent citizens inside of world where there exist globalized electronic frauds, backed by atomic bombs. The vast majority of the American People would not like to go through the severe cognitive dissonance that would be required, to not only recognize that "their" government was a criminal enterprise, but that it also must be, and that they too must necessarily be members of that organized crime gang. However, without that degree of perceptual paradigm shifts of the political problems, then enough of the American People could not become more competent citizens.

Somehow, most people continue to count on themselves never having to think about how and why progress was achieved in physical science, by going through series of profound paradigm shifts in the ways that we perceived the world. Most people continue to presume that it is not necessary for their perception of politics to go through profound paradigm shifts, that surpass those which have already been achieved in physical science. We continue to live in an oxymoronic scientific dictatorship, that employs science and technology to become better at being dishonest and violent, but does not apply science and technology to "face the facts" about that scientific dictatorship as a whole.

At the present time, technologies which have become trillions of times more capable and powerful are primarily used as special effects within the context of repeating the same old-fashioned, stupid social stories, such as promoted by the biggest bullies, and their surrounding controlled opposition groups. Ironically, especially when it comes to politics, that tends to manifest the most atavistic throwbacks to old-fashioned religions and ideologies being relied upon to propose bogus "solutions," despite that those kinds of social stories adamantly refuse to change their paradigms in light of the profound paradigms shifts which have been achieved in physical science.

The article above was another illustration of the ways that the typical reactionary revolutionaries, Black Sheeple, or controlled opposition groups, respond to recognizing the more and more blatant degrees to which there has been an accelerating "transformation of government into a criminal enterprise." THE PROBLEM IS THAT THEY CONTINUE TO STAY WITHIN THE SAME OLD-FASHIONED BULLSHIT-BASED FRAME OF REFERENCE, INSTEAD, AROUND AND AROUND WE GO, STUCK IN THE SAME DEEPENING RUTS, since they do NOT more fully "face the facts" regarding how and why the only realistic solutions to the real problems would require developing better organized crime. INSTEAD, they continue to promote the same dualities based upon false fundamental dichotomies, and the associate bogus "solutions" based upon impossible ideals ...

Given that overall situation, that there there almost nothing which is publicly significant than the core of organized crime, surrounded by controlled opposition groups, I see no reasonable hopes for the foreseeable material future of a civilization controlled by ENFORCED FRAUDS, since there is no publicly possible ways to develop better dynamic equilibria between the different systems of organized lies operating robberies, since the biggest forms of doing that were most able to get away with pretending that they are not doing that, which was facilitated by their controlled opposition promoting the opinions that nobody should do that, while actually everyone must be doing that.

Roberts' article above, to me, was another typical example of superficially correct analysis, which implies some bogus "solutions" because those are based upon the same superficiality. It is NOT good enough to recognize "transformation of government into a criminal enterprise," unless one goes through deeper levels of analysis regarding how and why that is what actually exists, and then, one should continue to be consistent with that deeper analysis when one turns to proposing genuine solutions to those problems, namely, I REPEAT THAT the only realistic resolutions to the real political problems requires the transformation of government into a better organized criminal enterprise, which ideally should be based upon enough citizens who are competent enough to understand that they are members of an organized crime gang, which should assert themselves to make sure that their country becomes better organized crime.

[Dec 20, 2017] Bill Black DSGE Dilettantes v. ADM God Devotees

Notable quotes:
"... By Bill Black, the author of The Best Way to Rob a Bank is to Own One, an associate professor of economics and law at the University of Missouri-Kansas City, and co-founder of Bank Whistleblowers United. Originally published at New Economic Perspectives ..."
"... A dilettante is a person who cultivates an area of interest, such as the arts, without real commitment or knowledge. The Dilettante Doctrine takes modern macro's arrogance to a new pinnacle. Only their model is legitimate, and it is illegitimate to criticize their DSGE models, even though they repeatedly fail. Instead, we must all "like" their models. We cannot make any statements about macroeconomics unless we "like [DSGE] models." The Dilettante Doctrine is a sure-fire means of winning academic disputes. You demand that your critics endorse your views, or you dismiss them as dilettantes unworthy of respect. ..."
"... Readers may recall that the scientific method works in the opposite direction of the Dilettante Doctrine. Modern macro proposes a theory (DSGE) and tests its predictive ability. The DSGE models fail recurrently, on the most important macro events, and the failures are massive. The scientific method requires the theorist of the failed model to declare it falsified. Economists who "like" repeatedly falsified DSGE models are, as Paul Romer famously declared, engaged in "pseudoscience." ..."
"... BTW, one of the best takes of macroeconomics I've encountered is Steve Keen's work, which I gratefully acknowledge I first read here on NC. Keen's critique of DSGE models is utterly spot-on and mathematically sophisticated. Part of the problem with economics is that it has been afflicted with 'math envy' since its earliest days, and the ADM results were proved with Banach Space methods, so they just *had* to be right. Google the phrase "spherical cow" for more on this mindset, not to mention one of the few really funny math jokes I know. ..."
Dec 20, 2017 | www.nakedcapitalism.com

By Bill Black, the author of The Best Way to Rob a Bank is to Own One, an associate professor of economics and law at the University of Missouri-Kansas City, and co-founder of Bank Whistleblowers United. Originally published at New Economic Perspectives

The truly exceptional thing about 'modern macroeconomics' devotees is not that they are so consistently and horrifically wrong or that they persist in their errors – but their exceptional combination of arrogance and disdain for those who have dramatically better records and broader and more relevant expertise. Kartik Athreya, the Richmond Fed's Research Director, led the modern macro parade on June 17, 2010 with his blog (which he later withdrew in embarrassment) when he announced the Athreya Axiom of Absolute Arrogance.

So far, I've claimed something a bit obnoxious-sounding: that writers who have not taken a year of PhD coursework in a decent economics department (and passed their PhD qualifying exams), cannot meaningfully advance the discussion on economic policy. Taken literally, I am almost certainly wrong. Some of them have great ideas, for sure. But this is irrelevant. The real issue is that there is extremely low likelihood that the speculations of the untrained, on a topic almost pathologically riddled by dynamic considerations and feedback effects, will offer anything new. Moreover, there is a substantial likelihood that it will instead offer something incoherent or misleading.

Modern macro devotees suffered far worse substantive embarrassment than Athreya's personal embarrassment. After Athreya (briefly) published his Axiom, a flurry of the world's top economists issued devastating critiques of modern macro's foundational myths in their dynamic stochastic general equilibrium (DSGE) models. The takedowns enraged and humiliated modern macro devotees, and because they are incapable of staying embarrassed, they doubled-down on Athreya's Axiom by announcing the Dilettante Doctrine .

People who don't like dynamic stochastic general equilibrium (DSGE) models are dilettantes. By this we mean they aren't serious about policy analysis.

Lawrence J. Christiano, Martin S. Eichenbaum, and Mathias Trabandt, authored "On DSGE Models on November 9, 2017. Christiano and Eichenbaum are freshwater modern macro devotees trained largely at the University of Minnesota, and now holding prominent positions at Northwestern. Trabandt is a German modern macro devotee.

A dilettante is a person who cultivates an area of interest, such as the arts, without real commitment or knowledge. The Dilettante Doctrine takes modern macro's arrogance to a new pinnacle. Only their model is legitimate, and it is illegitimate to criticize their DSGE models, even though they repeatedly fail. Instead, we must all "like" their models. We cannot make any statements about macroeconomics unless we "like [DSGE] models." The Dilettante Doctrine is a sure-fire means of winning academic disputes. You demand that your critics endorse your views, or you dismiss them as dilettantes unworthy of respect.

Readers may recall that the scientific method works in the opposite direction of the Dilettante Doctrine. Modern macro proposes a theory (DSGE) and tests its predictive ability. The DSGE models fail recurrently, on the most important macro events, and the failures are massive. The scientific method requires the theorist of the failed model to declare it falsified. Economists who "like" repeatedly falsified DSGE models are, as Paul Romer famously declared, engaged in "pseudoscience."

Athreya then inadvertently compounded modern macro's failures by putting in writing a bit too many of modern macro's darker secrets in his 2013 book about macroeconomics. Athreya confirmed many of the most fundamental criticisms of modern macro devotees, revealed additional failures that were even more devastating, and illustrated perfectly the blindness of modern macro's devotees to their dogmas and logic. Athreya did recognize clearly one dogma that made modern macro devotees unable to spot even the world's largest bubble – but treated that failure as if it were a virtue. Modern macro devotees train macroeconomists to be unable to identify warn against, or take action to end even the most destructive bubbles. This is like training surgeons to believe that shock cannot occur and they should ignore shock in treating patients.

I will return to these errors in subsequent columns, but in this initial column, I introduce Athreya's most embarrassing and devastating admission. Athreya goes on for over 100 pages on how wondrous his fellow modern macro devotees are. They are brilliant specialists who are the world's top practitioners of ultra-rigorous logic and ultra-sophisticated mathematics skills that make it impossible for them to be anything other than transparent and scrupulously honest. In particular, Athreya tells the reader that the paramount problem in macro and microeconomics is recognizing, understanding, and countering deceit, the defining element at law of fraud. (Actually, he does that only in an exceptionally opaque manner.) On p.103, however, Athreya admits that modern macro devotees know that their vaunted DSGE models rest on a fatal premise that is so preposterous and embarrassing that they dare not state it. "A silent assumption of the ADM model" is that "the ADM God" perfectly prevents all crimes, predation, and deceit – at no cost. Note that this means that modern macro devotees (silently) designed their DSGE models to be incapable of recognizing, understanding, measuring, or countering deceit, which they admit is their paramount and fatal failure.

It is never good to be arrogant. It is always dangerous and limiting to be (proudly) ignorant of fields that are likely to have superior understanding of issues such as deceit, fraud, and predation. Athreya's book displays his pride in both of these faults.

The authors of the Dilettante Doctrine inadvertently revealed another embarrassing modern macro failure of great importance. It is the combination of repeated, devastating failure and unfailing arrogance that defines (and dooms) modern macro as pseudoscientists. In fairness to the authors, they announced their Dilettante Doctrine in the context of an article admitting catastrophic errors in modern macro. They also unintentionally admit the non-scientific nature of their enterprise. Consider this passage:

For [IMF's leader] to take DSGE model-based recommendations seriously, the economic intuition underlying those recommendations has to be made in compelling and intuitive ways.

Yes, they actually wrote that for anyone to take DSGE models "seriously" their "economic intuition" must "be made intuitive." Wow, who knew science could be so 'intuitive?' Not satisfied with announcing their new "intuitive method" as a substitute for the scientific method, the authors double-down on the concept that 'intuition' is the secret sauce of economics declaring that the super-secret is to keep that 'intuition' "simple."

To be convincing, it is critical for a DSGE modeler to understand and convey the economic intuition behind the model's implications in simple and intuitive terms.

Notice that the authors are not stating the conditions required to make the DSGE models 'correct.' They are only interested in what practices will make the models' results "convincing" to the bosses.

The bosses decide "actual policymaking." The Dilettante Doctrine authors declare policymaking to be even less scientific than relying on 'simple' 'intuition' to convey DSGE model results. It turns out that DSGE models are the 'canvas' on which modern macro devotees "see the combined effect of the different colors" of their "art."

Inevitably, actual policymaking will always be to some extent an art. But even an artist needs a canvas to see the combined effect of the different colors. A DSGE model is that canvas.

These passages are not simply embarrassing, they are revealing. DSGE is a substantive farce that repeatedly fails because modern macro devotees shaped their models from the beginning to embrace laissez faire dogmas. The 'simple' 'intuitions' underlying DSGE models are the most destructive laissez faire dogmas. Narayana Kocherlakota's sly use of the word "almost" reveals his agreement with this point.

[A]lmost coincidentally -- in these [early DSGE] models, all government interventions (including all forms of stabilization policy) are undesirable.

The authors of the Dilettante Doctrine agree with Kocherlakota's observation about the original DSGE models.

The associated policy implications are clear: there was no need for any form of government intervention. In fact, government policies aimed at stabilizing the business cycle are welfare-reducing.

Modern macro is proud that its 'freshwater' and 'saltwater' factions have achieved a grand fusion. The saltwater types agreed to use DSGE models and the freshwater types agreed that the freshwater types could add 'frictions' to the DSGE models that would allow the models to at least purport to address some of the actual macroeconomic problems. There is a misleading view that because the 'saltwater' types often call themselves "New Keynesians" they must have views sympathetic to Keynesian thought. The Dilettante Doctrine authors make the useful point that "New Keynesian" dogma is actually Milton Friedman's core laissez faire dogmas.

Prototypical pre-crisis DSGE models built upon the chassis of the RBC model to allow for nominal frictions, both in labor and goods markets. These models are often referred to as New Keynesian (NK) DSGE models. But, it would be just as appropriate to refer to them as Friedmanite DSGE models. The reason is that they embody the fundamental world view articulated in Friedman's seminal Presidential Address .

The Dilettante Doctrine authors admit that DSGE models failed at the most fundamental level – they could not even spot that the economy was becoming progressively more dangerous and harmful.

Pre-crisis DSGE models didn't predict the increasing vulnerability of the US economy to a financial crisis.

The authors go badly wrong in multiple ways when they attempt to explain the DSGE models failures and their implications for economic theory and policy.

There is still an ongoing debate about the causes of the financial crisis. Our view, shared by Bernanke (2009) and many others, is that the financial crisis was precipitated by a rollover crisis in a very large and highly levered shadow-banking sector that relied on short-term debt to fund long-term assets.19

The trigger for the rollover crisis was developments in the housing sector. U.S. housing prices had risen rapidly in the 1990's with the S&P/Case-Shiller U.S. National Home Price Index rising by a factor of roughly 2.5 between 1991 and 2006. The precise role played by expectations, the subprime market, declining lending standards in mortgage markets, and overly-loose monetary policy is not critical for our purposes. What is critical is that housing prices began to decline in mid-2006, causing a fall in the value of the assets of shadow banks that had heavily invested in mortgage-backed securities. The Fed's willingness to provide a safety net for the shadow banking system was at best implicit, creating the conditions under which a roll-over crisis was possible. In fact a rollover crisis did occur and shadow banks had to sell their asset-backed securities at fire-sale prices, precipitating the Great Recession.

In sum, the pre-crisis mainstream DSGE models failed to forecast the financial crisis because they did not integrate the shadow banking system into their analysis.

I begin with the most fundamental failure – the failure to ask the right questions. Two prominent examples are why didn't the DSGE models warn us decades ago that the economy was systematically misallocating assets and creating the largest bubble in world history and what should we do to change the perverse incentives harming the economy and economic stability? Kocherlakota, in the same article from which I quoted above, emphasized that modern macro failed to warn about the coming financial crisis and the Great Recession and failed to provide effective policies to respond to them.

The dilettante article only uses the word 'bubble' once – to describe the tech bubble. It never labels the vastly larger housing bubble a 'bubble.' The dilettante article's authors claim it is not relevant for their purposes to know how the bubble arose, why it continued to inflate for over a decade, why it burst, or why it triggered the global financial crisis and the Great Recession. Only a dilettante could make or believe that claim.

Recall that Athreya emphasizes that deceit is the key factor that screws up economies – and that DSGE models "silently" assume "the ADM God" makes deceit impossible. I have explained in scores of columns why deceit, fraud, and predation were the central causes of the housing bubble hyper-inflating, the financial crisis, and the creation of the Great Recession. The dilettante authors refusal to call the housing bubble a bubble does not change the fact that they claim that the dramatic fall in housing values after 2005 was the paramount "trigger" of the financial crisis and the Great Recession.

The dilettante authors create a fiction about what "precipitat[ed] the Great Recession.

In fact a rollover crisis did occur and shadow banks had to sell their asset-backed securities at fire-sale prices, precipitating the Great Recession.

The dilettante authors then make their twin ' mea culpa ' on behalf of modern macro.

Against this background, we turn to the first of the two criticisms of DSGE models mentioned above, namely their failure to signal the increasing vulnerability of the U.S. economy to a financial crisis. This criticism is correct. The failure reflected a broader failure of the economics community.

The failure was to allow a small shadow-banking system to metastasize into a massive, poorly-regulated wild west-like sector that was not protected by deposit insurance or lender-of-last-resort backstops.

We now turn to the second criticism of DSGE models, namely that they did not sufficiently emphasize financial frictions. One reason why modelers did not emphasize financial frictions in DSGE models is that until the recent crisis, post-war recessions in the U.S. and Western Europe did not seem closely tied to disturbances in financial markets. The Savings and Loans crisis in the US was a localized affair that did not grow into anything like the Great Recession. Similarly, the stock market meltdown in the late 1980's and the bursting of the tech-bubble in 2001 only had minor effects on aggregate economic activity.

At the same time, the financial frictions that were included in DSGE models did not seem to have very big effects.

The dilettante authors have no idea how important their concessions are. Their premise is that it was government regulation, deposit insurance, and the central bank's 'lender of last resort' function that prevented prior epidemics of accounting control fraud from causing anything worse than "minor effects on aggregate economic activity." The obvious problem is that since its inception 30 years ago modern macro ideologues have claimed the opposite is true – that governmental action is unnecessary and harmful. They constructed their DSGE models to valorize their Friedmanite dogmas.

The less obvious problem is that freshwater modern macro has claimed that the lesson of the financial crisis is the opposite. Athreya and the Richmond Fed have preached for years that the federal safety net caused the housing problem, the financial crisis, and the Great Recession. The Richmond Fed claims that the key policy response to future financial crises is allowing the shadow sector to collapse in an orgy of "rollover cris[e]s."

The broader problem is why the dilettante authors are so wedded to their failed models, which at their core assume out of existence the institutions and events they say are most critical to explaining the catastrophic failures of their models. Why, for example, start with a general equilibrium model based on absurdly utopian assumptions (stated and unstated) that invariably produces equilibrium when the things we most need to study involve the failure of markets to function? It is nonsensical to make contradictory assumptions in different parts of your model about human behavior. Modern macro models keep failing and their devotees' response is to add (over time) dozens of fudges that posit that humans typically act in a manner that contradicts to the explicit and unstated assumptions of the DSGE model about human behavior. DSGE models increasingly resemble Borg constructs. The Borg also claim that there is no alternative to assimilation into their collective.

Aaron Layman , December 20, 2017 at 10:23 am

Excellent points. Helps to explain how you get a supposedly serious site covering real estate falling for ridiculous tripe about the root cause of the housing crisis (aka Great Recession). Take a careful look at the bombshell "working paper" and the new "narrative" cited, and you can see the groupstink of the Fed written all over it
https://betterdwelling.com/forget-subprime-canadian-real-estate-buyers-investors-crashed-the-us-market/

diptherio , December 20, 2017 at 11:07 am

Great article.

Modern mainstream macro is like a police detective whose model of the world states that people are nice and the body heals itself, and that therefore we will all live happily ever after. When confronted by a murder victim lying in a pool of their own blood, and that fact's apparent incompatibility with their model of the world, they respond, "My model is correct only, you see, it failed to account for sudden massive blood loss. How that loss of blood happened is beyond the scope of my investigation, the important thing is that I've now incorporated that knowledge in my new improved model, which proves that we will all live happily ever after -- except in cases of a sudden, massive loss of blood ."

Altandmain , December 20, 2017 at 12:01 pm

There has not been a big mea-culpa from neoliberal economists after the 2008 Financial Crisis. I don't think there will be. Many are essentially the equal of religious fundamentalists.

However, we should also remember that the very wealthy have backed the neoliberal economists against the general public. Neolibe3ralism provides a pseudoscientific economic excuse for what amounts to turning society into a plutocracy, which is precisely what the rich want.

shinola , December 20, 2017 at 2:10 pm

" essentially the equal of religious fundamentalists."

Yes – nailed it!

flora , December 20, 2017 at 3:26 pm

aka: The divine right of markets. /s

Skip Intro , December 20, 2017 at 3:12 pm

The GFC worked out very well for the neoliberal agenda. What you can't predict, you don't need to prevent or protect against. If the result happens to be a massive transfer of funds from states to speculators that eases the path to austerity and asset stripping, what's to apologize for?

Matthew G. Saroff , December 20, 2017 at 12:16 pm

What is ADM, aside from the agribusiness?

Robert Denne , December 20, 2017 at 12:50 pm

ADM is the Arrow-Debreu-McKenzie (ADM) model, as revealed in the blurb for the Athreya book on Amazon.

Jean , December 20, 2017 at 12:31 pm

Lack of higher math skills precludes citizen involvement in economics.
Blame it on the math card in PCs that makes doing it by hand and thus learning and understanding how numbers work.

voislav , December 20, 2017 at 1:28 pm

Most economists lack higher math skills too, but that doesn't seem to be obstacle for them. It's spherical chickens in a vacuum, models that are supposedly related to real world but are simplified beyond recognition because most economists are ignorant of even rudimentary statistics.

djrichard , December 20, 2017 at 1:31 pm

You don't need math to follow the money.

Amfortas the Hippie , December 20, 2017 at 3:59 pm

and you don't need math to discover that the holy Models rely on downright silly assumptions about Human Beings.
"rational actors with perfect information".
lol.
Most of the economic actors I know do not even remotely resemble that.
and whomever said that modern econ is akin to fundamentalist religion is right on.
I can't read "Money" or watch CNBC without thinking about Pat Robertson or Billy Graham.
It's just a different god they worship.
With this in mind, I think it's hilarious that the current hyperventilation about "cryptocurrency" could possibly be the bubble that, in popping, brings the whole mess down.
"Masters of the Universe", indeed.

Know Thy Farmer.

Synoia , December 20, 2017 at 12:48 pm

Personally I believe economic as practiced is an example of telling the boss (the King) what they want to hear.

Economist appear descended form a long line of Court Magicians, telling the futures from the entrails of an animal, consulting the spirits for guidance, or using a Chrystal ball.

Of more pointedly Bullshit, baffles brains.

Prof Black make the point that he DSGE models assume away fraud. They also assume people are "rational actors, driven only by logic," that is: we are all Vulcans from Star Trek.

A simple view of women's fashions (high heels) with regard to comfort or safety would demolish any theory of people as "rational actors." Or men's behavior over their "sports teams."

To assume away human behavior and emotion, and thus chaos or catastrophe theory, would put economists at odds with their masters, and cut their income, by the nearly always fatal, or career limiting "telling truth to power."

It's interesting to speculate what would be the scope or size of common ground in a dialog between anthropologists and economists. Null set perhaps?

PB , December 20, 2017 at 1:28 pm

Hi all,

Just a quick note for those who were initially confused by Bill Black's use of "modern macroeconomic theory" and thought "modern monetary theory". (I know I did, and was initially really confused by his take, and had to re-read the first three paragraphs a few times to re-set my mental pointers). As far as I know (and I did a year of Ph.D economics at Stanford, so I pass Arthreya's first test) I haven't heard of "modern" applied to DSGE macro but that probably reflects my choice of reading material more than anything else. In short, "modern macro" is bad, "modern monetary" is good.

BTW, one of the best takes of macroeconomics I've encountered is Steve Keen's work, which I gratefully acknowledge I first read here on NC. Keen's critique of DSGE models is utterly spot-on and mathematically sophisticated. Part of the problem with economics is that it has been afflicted with 'math envy' since its earliest days, and the ADM results were proved with Banach Space methods, so they just *had* to be right. Google the phrase "spherical cow" for more on this mindset, not to mention one of the few really funny math jokes I know.

Cheers,

P

[Dec 20, 2017] Diletantism: A dilettante is a person who cultivates an area of interest, such as the arts, without real commitment or knowledge

Adj. 1. dilettantish - showing frivolous or superficial interest; amateurish; "his dilettantish efforts at painting" -- superficial - concerned with or comprehending only what is apparent or obvious; not deep or penetrating emotionally or intellectually; "superficial similarities"; "a superficial mind"; "his thinking was superficial and fuzzy"; "superficial knowledge"; "the superficial report didn't give the true picture"; "only superficial differences"
Notable quotes:
"... A dilettante is a person who cultivates an area of interest, such as the arts, without real commitment or knowledge. The Dilettante Doctrine takes modern macro's arrogance to a new pinnacle. Only their model is legitimate, and it is illegitimate to criticize their DSGE models, even though they repeatedly fail. Instead, we must all "like" their models. We cannot make any statements about macroeconomics unless we "like [DSGE] models." The Dilettante Doctrine is a sure-fire means of winning academic disputes. You demand that your critics endorse your views, or you dismiss them as dilettantes unworthy of respect. ..."
"... Readers may recall that the scientific method works in the opposite direction of the Dilettante Doctrine. Modern macro proposes a theory (DSGE) and tests its predictive ability. The DSGE models fail recurrently, on the most important macro events, and the failures are massive. The scientific method requires the theorist of the failed model to declare it falsified. Economists who "like" repeatedly falsified DSGE models are, as Paul Romer famously declared, engaged in "pseudoscience." ..."
"... There has not been a big mea-culpa from neoliberal economists after the 2008 Financial Crisis. I don't think there will be. Many are essentially the equal of religious fundamentalists. ..."
"... Personally I believe economic as practiced is an example of telling the boss (the King) what they want to hear. Economist appear descended form a long line of Court Magicians, telling the futures from the entrails of an animal, consulting the spirits for guidance, or using a Chrystal ball. Of more pointedly Bullshit, baffles brains. ..."
"... A simple view of women's fashions (high heels) with regard to comfort or safety would demolish any theory of people as "rational actors." Or men's behavior over their "sports teams." ..."
Dec 20, 2017 | www.nakedcapitalism.com

A dilettante is a person who cultivates an area of interest, such as the arts, without real commitment or knowledge. The Dilettante Doctrine takes modern macro's arrogance to a new pinnacle. Only their model is legitimate, and it is illegitimate to criticize their DSGE models, even though they repeatedly fail. Instead, we must all "like" their models. We cannot make any statements about macroeconomics unless we "like [DSGE] models." The Dilettante Doctrine is a sure-fire means of winning academic disputes. You demand that your critics endorse your views, or you dismiss them as dilettantes unworthy of respect.

Readers may recall that the scientific method works in the opposite direction of the Dilettante Doctrine. Modern macro proposes a theory (DSGE) and tests its predictive ability. The DSGE models fail recurrently, on the most important macro events, and the failures are massive. The scientific method requires the theorist of the failed model to declare it falsified. Economists who "like" repeatedly falsified DSGE models are, as Paul Romer famously declared, engaged in "pseudoscience."

Athreya then inadvertently compounded modern macro's failures by putting in writing a bit too many of modern macro's darker secrets in his 2013 book about macroeconomics. Athreya confirmed many of the most fundamental criticisms of modern macro devotees, revealed additional failures that were even more devastating, and illustrated perfectly the blindness of modern macro's devotees to their dogmas and logic. Athreya did recognize clearly one dogma that made modern macro devotees unable to spot even the world's largest bubble – but treated that failure as if it were a virtue. Modern macro devotees train macroeconomists to be unable to identify warn against, or take action to end even the most destructive bubbles. This is like training surgeons to believe that shock cannot occur and they should ignore shock in treating patients.

Altandmain , December 20, 2017 at 12:01 pm

There has not been a big mea-culpa from neoliberal economists after the 2008 Financial Crisis. I don't think there will be. Many are essentially the equal of religious fundamentalists.

However, we should also remember that the very wealthy have backed the neoliberal economists against the general public. Neolibe3ralism provides a pseudoscientific economic excuse for what amounts to turning society into a plutocracy, which is precisely what the rich want.

shinola , December 20, 2017 at 2:10 pm

" essentially the equal of religious fundamentalists."

Yes – nailed it!

Synoia , December 20, 2017 at 12:48 pm

Personally I believe economic as practiced is an example of telling the boss (the King) what they want to hear. Economist appear descended form a long line of Court Magicians, telling the futures from the entrails of an animal, consulting the spirits for guidance, or using a Chrystal ball. Of more pointedly Bullshit, baffles brains.

Prof Black make the point that he DSGE models assume away fraud. They also assume people are "rational actors, driven only by logic," that is: we are all Vulcans from Star Trek.

A simple view of women's fashions (high heels) with regard to comfort or safety would demolish any theory of people as "rational actors." Or men's behavior over their "sports teams."

To assume away human behavior and emotion, and thus chaos or catastrophe theory, would put economists at odds with their masters, and cut their income, by the nearly always fatal, or career limiting "telling truth to power."

It's interesting to speculate what would be the scope or size of common ground in a dialog between anthropologists and economists. Null set perhaps?

[Dec 19, 2017] Do not Underestimate the Power of Microfoundations

Highly recommended!
Nice illustration of ideologically based ostrakism as practiced in Academia: "Larry [Summers] leaned back in his chair and offered me some advice. I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don't listen to them. Insiders, however, get lots of access and a chance to push their ideas. People - powerful people - listen to what they have to say. But insiders also understand one unbreakable rule: they don't criticize other insiders."
Notable quotes:
"... A more probable school of thought is that this game was created as a con and a cover for the status quo capitalist establishment to indulge themselves in their hard money and liquidity fetishes, consequences be damned. ..."
"... The arguments over internal and external consistency of models is just a convenient misdirection from what policy makers are willing to risk and whose interests they are willing to risk policy decisions for ..."
"... Mathematical masturbations are just a smoke screen used to conceal a simple fact that those "economists" are simply banking oligarchy stooges. Hired for the specific purpose to provide a theoretical foundation for revanschism of financial oligarchy after New Deal run into problems. Revanschism that occurred in a form of installing neoliberal ideology in the USA in exactly the same role which Marxism was installed in the USSR. With "iron hand in velvet gloves" type of repressive apparatus to enforce it on each and every university student and thus to ensure the continues, recurrent brainwashing much like with Marxism on the USSR universities. ..."
"... To ensure continuation of power of "nomenklatura" in the first case and banking oligarchy in the second. Connections with reality be damned. Money does not smell. ..."
"... Economic departments fifth column of neoliberal stooges is paid very good money for their service of promoting and sustaining this edifice of neoliberal propaganda. Just look at Greg Mankiw and Rubin's boys. ..."
"... "Larry [Summers] leaned back in his chair and offered me some advice. I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don't listen to them. Insiders, however, get lots of access and a chance to push their ideas. People - powerful people - listen to what they have to say. But insiders also understand one unbreakable rule: they don't criticize other insiders." ..."
Apr 04, 2015 | Economist's View

Darryl FKA Ron -> pgl...

At the risk of oversimplifying might it not be as simple as stronger leanings towards IS-LM and kind are indicative of a bias towards full employment and stronger leanings towards DSGE, microfoundations, and kind are indicative of a bias towards low inflation?

IN general I consider over-simplification a fault, if and only if, it is a rigidly adhered to final position. This is to say that over-simplification is always a good starting point and never a good ending point. If in the end your problem was simple to begin with, then the simplified answer would not be OVER-simplified anyway. It is just as bad to over-complicate a simple problem as it is to over-simplify a complex problem. It is easier to build complexity on top of a simple foundation than it is to extract simplicity from a complex foundation.

A lot of the Chicago School initiative into microfoundations and DSGE may have been motivated by a desire to bind Keynes in a NAIRU straight-jacket. Even though economic policy making is largely done just one step at a time then that is still one step too much if it might violate rentier interests.

Darryl FKA Ron -> Barry...

There are two possible (but unlikely) schools of (generously attributed to as) thought for which internal consistency might take precedence over external consistency. One such school wants to consider what would be best in a perfect world full of perfect people and then just assume that is best for the real world just to let the chips fall where they may according to the faults and imperfections of the real world. The second such school is the one whose eyes just glaze over mesmerized by how over their heads they are and remain affraid to ask any question lest they appear stupid.

A more probable school of thought is that this game was created as a con and a cover for the status quo capitalist establishment to indulge themselves in their hard money and liquidity fetishes, consequences be damned.

Richard H. Serlin

Consistency sounds so good, Oh, of course we want consistency, who wouldn't?! But consistent in what way? What exactly do you mean? Consistent with reality, or consistent with people all being superhumans? Which concept is usually more useful, or more useful for the task at hand?

Essentially, they want models that are consistent with only certain things, and often because this makes their preferred ideology look far better. They want models, typically, that are consistent with everyone in the world having perfect expertise in every subject there is, from finance to medicine to engineering, perfect public information, and perfect self-discipline, and usually on top, frictionless and perfectly complete markets, often perfectly competitive too.

But a big thing to note is that perfectly consistent people means a level of perfection in expertise, public information, self-discipline, and "rationality", that's extremely at odds with how people actually are. And as a result, this can make the model extremely misleading if it's interpreted very literally (as so often it is, especially by freshwater economists), or taken as The Truth, as Paul Krugman puts it.

You get things like the equity premium "puzzle", which involves why people don't invest more in stocks when the risk-adjusted return appears to usually be so abnormally good, and this "puzzle" can only be answered with "consistency", that people are all perfectly expert in finance, with perfect information, so they must have some mysterious hidden good reason. It can't be at all that it's because 65% of people answered incorrectly when asked how many reindeer would remain if Santa had to lay off 25% of his eight reindeer ( http://richardhserlin.blogspot.com/2013/12/surveys-showing-massive-ignorance-and.html ).

Yes, these perfect optimizer consistency models can give useful insights, and help to see what is best, what we can do better, and they can, in some cases, be good as approximations. But to say they should be used only, and interpreted literally, is, well, inconsistent with optimal, rational behavior -- of the economist using them.

Richard H. Serlin -> Richard H. Serlin...
Of course, unless the economist using them is doing so to mislead people into supporting his libertarian/plutocratic ideology.

dilbert dogbert

As an old broken down mech engineer, I wonder why all the pissing and moaning about micro foundations vs aggregation. In strength of materials equations that aggregate properties work quite well within the boundaries of the questions to be answered. We all know that at the level of crystals, materials have much complexity. Even within crystals there is deeper complexities down to the molecular levels. However, the addition of quantum mechanics adds no usable information about what materials to build a bridge with.

But, when working at the scale of the most advanced computer chips quantum mechanics is required. WTF! I guess in economics there is no quantum mechanics theories or even reliable aggregation theories.

Poor economists, doomed to argue, forever, over how many micro foundations can dance on the head of a pin.

RGC -> dilbert dogbert...

Endless discussions about how quantum effects aggregate to produce a material suitable for bridge building crowd out discussions about where and when to build bridges. And if plutocrats fund the endless discussions, we get the prominent economists we have today.

Darryl FKA Ron -> dilbert dogbert...

"...I guess in economics there is no quantum mechanics theories or even reliable aggregation theories..."

[I guess it depends upon what your acceptable confidence interval on reliability is. Most important difference that controls all the domain differences between physical science and economics is that underlying physical sciences there is a deterministic methodology for which probable error is merely a function of the inaccuracy in input metrics WHEREAS economics models are incomplete probabilistic estimating models with no ability to provide a complete system model in a full range of circumstances.

YOu can design and build a bridge to your load and span requirements with alternative models for various designs with confidence and highly effective accuracy repeatedly. No ecomomic theory, model, or combination of models and theories was ever intended to be used as the blueprint for building an economy from the foundation up.

With all the formal trappings of economics the only effective usage is to decide what should be done in a given set of predetermined circumstance to reach some modest desired effect. Even that modest goal is exposed to all kinds of risks inherent in assumptions, incomplete information, externalities, and so on that can produce errors of uncertain potential bounds.

Nonetheless, well done economics can greatly reduce the risks encountered in the random walk of economics policy making. So much so is this true, that the bigger questions in macro-economics policy making is what one is willing to risk and for whom.

The arguments over internal and external consistency of models is just a convenient misdirection from what policy makers are willing to risk and whose interests they are willing to risk policy decisions for.]

Darryl FKA Ron -> Peter K....

unless you have a model which maps the real world fairly closely like quantum mechanics.

[You set a bar too high. Macro models at best will tell you what to do to move the economy in the direction that you seek to go. They do not even ocme close to the notion of a theory of everything that you have in physics, even the theory of every little thing that is provided by quantum mechanics. Physics is an empty metaphor for economics. Step one is to forgo physics envy in pursuit of understanding suitable applications and domain constraints for economics models.

THe point is to reach a decision and to understand cause and effect directions. All precision is in the past and present. The future is both imprecise and all that there is that is available to change.

For the most part an ounce of common sense and some simple narrative models are all that are essential for making those policy decisions in and of themselves. HOWEVER, nation states are not ruled by economist philosopher kings and in the process of concensus decision making by (little r)republican governments then human language is a very imprecise vehicle for communicating logic and reason with respect to the management of complex systems. OTOH, mathematics has given us a universal language for communicating logic and reason that is understood the same by everyone that really understands that language at all. Hence mathematical models were born for the economists to write down their own thinking in clear precise terms and check their own work first and then share it with others so equipped to understand the language of mathematics. Krugman has said as much many times and so has any and every economist worth their salt.]

likbez -> Syaloch...

I agree with Pgl and PeterK. Certain commenters like Darryl seem convinced that the Chicago School (if not all of econ) is driven by sinister, class-based motives to come up justifications for favoring the power elite over the masses. But based on what I've read, it seems pretty obvious that the microfoundation guys just got caught up in their fancy math and their desire to produce more elegant, internally consistent models and lost sight of the fact that their models didn't track reality.

That's completely wrong line of thinking, IMHO.

Mathematical masturbations are just a smoke screen used to conceal a simple fact that those "economists" are simply banking oligarchy stooges. Hired for the specific purpose to provide a theoretical foundation for revanschism of financial oligarchy after New Deal run into problems. Revanschism that occurred in a form of installing neoliberal ideology in the USA in exactly the same role which Marxism was installed in the USSR.
With "iron hand in velvet gloves" type of repressive apparatus to enforce it on each and every university student and thus to ensure the continues, recurrent brainwashing much like with Marxism on the USSR universities.

To ensure continuation of power of "nomenklatura" in the first case and banking oligarchy in the second. Connections with reality be damned. Money does not smell.

Economic departments fifth column of neoliberal stooges is paid very good money for their service of promoting and sustaining this edifice of neoliberal propaganda. Just look at Greg Mankiw and Rubin's boys.

But the key problem with neoliberalism is that the cure is worse then disease. And here mathematical masturbations are very handy as a smoke screen to hide this simple fact.

likbez -> likbez...

Here is how Rubin's neoliberal boy Larry explained the situation to Elizabeth Warren:

"Larry [Summers] leaned back in his chair and offered me some advice. I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don't listen to them. Insiders, however, get lots of access and a chance to push their ideas. People - powerful people - listen to what they have to say. But insiders also understand one unbreakable rule: they don't criticize other insiders."

Elizabeth Warren, A Fighting Chance

Syaloch -> likbez...

Yeah, case in point.

[Dec 14, 2017] In defence of the labour theory of value

Actually Marx's "labor theory of value" should be properly called the "theory of surplus value".
Notable quotes:
"... For Marx, value was socially-necessary labour time: David Harvey is good on this. From this perspective, exploitation and alienation are linked. Workers are exploited because they must work longer than necessary to get their consumption bundle. And they are alienated because this work is unsatisfying and a source of unfreedom. Now, I'll concede that many people hate the labour theory of value. One reason for this is that many discussions of it quickly become obscurantist – as if "value" is some mystical entity embodied in commodities. ..."
"... This, though, certainly was not Marx's intention. Quite the opposite. He intended his theory to be a demystification. He wanted to show how what looked like relations between things – the exchange of money for goods or labour-time – were in fact relations between people. And unequal ones at that. ..."
"... I suspect that some of the animosity to Marx's use of LTV arises because of a resistance to the inference that Marx drew from it – that workers are exploited. This issue, however, is independent of the validity of not of the LTV. For example, Roemer thinks workers are exploited without believing in the LTV, and Smith believed the LTV without arguing that workers were exploited. ..."
"... * He seems to be recovering now. The vet is also expected to make a full recovery eventually. ..."
"... Further understanding, which evolved after Marx, is that the LTV is just special case of the principle that what produces a surplus of usefulness is not labour per se, but the energy used in the transformation of a larger quantity of something into a smaller quantity of something else, and muscle power is just one way, even if it was the main one for a very long time, to obtain energy to transform a large quantity of less useful commodities into a smaller quantity of more useful commodities. ..."
"... And this follows into the impression that I have derived from various authors that our high standards of living depend not on the high "productivity" of labour, but on the high "productivity" of fossil fuels, which are the product of the fertility of land ..."
"... the complex process of differentiation in the economy (aka the division of labor) obscures the relationship between the creation of the surplus (work time above that necessary to reproduce consumption bundle) and its utilization by capitalists via investment. Investment is not possible without exploitation of workers, but that relationship is occluded by the mechanics of employment, markets, and property. ..."
"... My impression is that your bearded friend Karl does not use "alienation" in that sense at all, in an economic sense, but in a humanist sense: that by being separated from the means of production proletarians are alienated from the meaning of their work, from work as a human activity, as distinct from an economic activity ..."
"... Practically every "Dilbert" strip is about "alienation". This is my favourite ..."
"... Placing a high value on the frivolous and "useless" has always been the hallmark of those most able to decide the value of anything, because they have no use for economic use (so to speak), but rather social signaling. Broad social respect is an extremely expensive thing to buy with money alone. ..."
Dec 11, 2017 | stumblingandmumbling.typepad.com

Lucius has been poorly recently, which has required some trips to the vet and therefore a bill of a size that only David Davis could negotiate*. This has made me wonder: is there more to be said for the labour theory of value than we like to think?

For a long time, I've not really cared about this theory one way or the other. This is partly because I've not bothered much with questions of value; partly because, as John Roemer has shown, we don't need (pdf) a labour theory of value to suggest workers are exploited; and partly because the main Marxian charges against capitalism – for example that it entails relationships of domination – hold true (or not!) independently of the theory.

As I approach retirement, however, I've begun to change my mind. I think of major expenses in terms of labour-time because they mean I have to work longer. A trip to the vet is an extra fortnight of work; a good guitar an extra month, a car an extra year, and so on.

When I consider my spending, I ask: what must I give up in order to get that? And the answer is my time and freedom. My labour-time is the measure of value.

This is a reasonable basis for the claim that workers are exploited. To buy a bundle of goods and services, we must work a number of hours a week. But taking all workers together, the hours we work are greater than the hours needed to produce those bundles because we must also work to provide a profit for the capitalist. As Marx put it:

We have seen that the labourer, during one portion of the labour-process, produces only the value of his labour-power, that is, the value of his means of subsistence During the second period of the labour-process, that in which his labour is no longer necessary labour, the workman, it is true, labours, expends labour-power; but his labour, being no longer necessary labour, he creates no value for himself. He creates surplus-value which, for the capitalist, has all the charms of a creation out of nothing. This portion of the working-day, I name surplus labour-time.

For Marx, value was socially-necessary labour time: David Harvey is good on this. From this perspective, exploitation and alienation are linked. Workers are exploited because they must work longer than necessary to get their consumption bundle. And they are alienated because this work is unsatisfying and a source of unfreedom. Now, I'll concede that many people hate the labour theory of value. One reason for this is that many discussions of it quickly become obscurantist – as if "value" is some mystical entity embodied in commodities.

This, though, certainly was not Marx's intention. Quite the opposite. He intended his theory to be a demystification. He wanted to show how what looked like relations between things – the exchange of money for goods or labour-time – were in fact relations between people. And unequal ones at that.

What's more, the charge of obscurantism against Marx is an especially weak one when it comes from orthodox economics. Much of this invokes unobservable concepts such as the natural rate of unemployment, marginal productivity, utility, the marginal product of capital and natural rate of interest – ideas which, in the last two cases, might not even be theoretically coherent.

In fact, the LTV is reasonably successful by the standards of conventional economics: we have empirical evidence to suggest that it does (pdf) a decent (pdf) job of explaining (pdf) relative prices – not that this was how Marx intended it to be used.

You can of course, think of counter-examples to the theory. But so what? in the social sciences, no substantial theory is 100% true.

I suspect that some of the animosity to Marx's use of LTV arises because of a resistance to the inference that Marx drew from it – that workers are exploited. This issue, however, is independent of the validity of not of the LTV. For example, Roemer thinks workers are exploited without believing in the LTV, and Smith believed the LTV without arguing that workers were exploited.

By the (low) standards of economic theories, perhaps the LTV isn't so bad.

* He seems to be recovering now. The vet is also expected to make a full recovery eventually.

December 11, 2017 Permalink

Comments

Luis Enrique , December 11, 2017 at 02:09 PM

But the LTV says more than the output of the economy is divided between the workers and the (suppliers and) owners of capital goods, doesn't it? I mean, mainstream econ says that too. And unless ownership of capital inputs to production is distributed equally across society, then some people consume things that other's labour has produced, which means workers must produce more than they consume. But again, that's basic mainstream stuff, not LVT. You end by saying you can believe in exploitation but not LVT, and vice versa, but the main body of this blog seems to be connecting the two. I am confused.

Of course if you have the ability to vary your labour supply, and labour is how you earn your money, then you ask yourself how much you need to work to purchase whatever. But again that's mainstream not LVT.

David Friedman , December 11, 2017 at 06:14 PM

Your version of the labor theory of value is one of Adam Smith's versions. I don't think it is Marx's, but I know Smith better than Marx.

And definitely not Ricardo's.

ConfusedNeoLiberal , December 11, 2017 at 08:51 PM

What about value, in terms of risk among others, that the employers put in starting a new business?

Blissex , December 12, 2017 at 12:23 AM

"Smith believed the LTV without arguing that workers were exploited."

The Marxian approach was interested in, as other commenters have said, in the specific capitalist case, where "capitalism" for him means strictly "labour for hire" by workers alienated from the means of production by their ownership by capitalists.

But the labour theory of value, as understood by what Marx called "classicals", applies also to all labour, and he used it in that sense.

My understanding of the classicals and the LTV is reduced to a minimum this:

Further understanding, which evolved after Marx, is that the LTV is just special case of the principle that what produces a surplus of usefulness is not labour per se, but the energy used in the transformation of a larger quantity of something into a smaller quantity of something else, and muscle power is just one way, even if it was the main one for a very long time, to obtain energy to transform a large quantity of less useful commodities into a smaller quantity of more useful commodities.

And this follows into the impression that I have derived from various authors that our high standards of living depend not on the high "productivity" of labour, but on the high "productivity" of fossil fuels, which are the product of the fertility of land.

Blissex , December 12, 2017 at 12:29 AM

"value, in terms of risk among others, that the employers put in starting a new business?"

If the business produces a surplus, that is value added, than the surplus is the product of the energy/labour expended by all participants

How it is accounted for is one issue, especially over multiple time periods, and how it is shared out is a social relationship.

As to risk, everybody in the business runs the risk of not getting paid at the end of the month, and the opportunity cost of not doing something else, whichever labour they put in.

How risk and opportunity cost are accounted for, especially over multiple time periods, is another issue, and how they are shared is another social relationship.

Blissex , December 12, 2017 at 01:14 AM

"the surplus is the product of the energy/labour expended by all participants"

I'll perhaps further diminish the reputation of my "contributions" this way: perhaps all social relationships of production (at least among males) map closely onto (cursorial) group hunts.

https://78.media.tumblr.com/d4db6631d383cbfc9bd135c799a06e7f/tumblr_n3u8r0eJu01sohvpko1_500.jpg

:-)

Luis Enrique , December 12, 2017 at 08:40 AM

That's a very long winded way of saying that making stuff requires labour.

Blissex , December 12, 2017 at 01:50 PM

"a very long winded way of saying that making stuff requires labour"

Well, that's obvious, but what the classicals thought of as the LTV was not entirely obvious: that "surplus" (rather than "stuff") comes from the fertility of land and the transformation achieved with labour, and that nothing else is needed to achieve "surplus". Because for example capital goods are themselves surplus from fertility or labour, again back to the first blades made from chipping lumps of obsidian.

That's quite a bit more insightful, never mind also controversial, than "making stuff requires labour".

Rich Clayton , December 12, 2017 at 03:35 PM

Love this post. But, being a fellow marxist, I can't help but to disagree with this bit: "And they are alienated because this work is unsatisfying and a source of unfreedom." This is a colloquial use of alienation, and its not wrong.

But Marx is getting at something else: the complex process of differentiation in the economy (aka the division of labor) obscures the relationship between the creation of the surplus (work time above that necessary to reproduce consumption bundle) and its utilization by capitalists via investment. Investment is not possible without exploitation of workers, but that relationship is occluded by the mechanics of employment, markets, and property.

That's the sense in which workers are alienated under capitalism. Socialism could still have boring work, but, in so far as the investment function is brought under collective democratic control, workers would not be alienated in the special sense Marx is using.

Lukas , December 12, 2017 at 03:41 PM

@Luis Enrique

"Where else could stuff come from?" Well, assuming by "stuff" we mean objects of value, nowhere. But the reasons for which we value them are not dependent upon their natural origins or the labor required for their production. I don't value a computer because it's made of plastic and silicon and so forth, nor because of the labor required to produce it. It's useful because of what it does, not what it is; it's sort of Kant's definition of art versus the general conception of tools.

As for the relationship between production functions and the LTV, that seems (at least prima facie) pretty straightforward. If there is a high olefimity ascribed to the surplus provided by the product created by X, Y, then those production functions will, themselves, be assigned greater value, i.e., be worthy of more labor-time to attain. E.g., even if I'm not very good at fishing, if I really like the flavor of fish over other protein sources, I'll spend more time increasing my labor efficiency (be a better fisherman).

Blissex , December 12, 2017 at 05:36 PM

"Everything ultimately derives from nature and the labour of humans. Where else could stuff come from? That's all there is."

Then in theory the cost (not the price) of everything can be measured in terms of physical quantities of primary inputs and of hours of work.

"What's controversial about it?"

What is controversial is that written like that you sound like a Marxist: the alternative approach is to say that *property* creates surplus.
In the standard neoclassical approach "property" is the often forgotten "initial endowments" of the single representative agent.

Anyhow the "narrative" is: as Mr. Moneybags owns the iron mine and the coal mine and the smelter and the ingot roller and spoon press, then he is entitled to the surplus because without his property it is impossible to make spoons. Labour on its own is worthless, wastes away, while property is "valuable" capital.

"And how one gets from a production function (stuff is made from X, Y and Z) to LTV"

Production functions are just not very elaborate scams to pretend that property is the factor of production, rather then the fertility of land and the energy of labour, and land does not exist (after JB Clark "disappeared" it) and labour is just an accessory. Part of the scam is that "X, Y and Z" are denominated in money, not physical quantities.

As I wrote in another answer accounting for the output of land fertility and labour energy and how it is shared are the difficult bits. Welcome to the institutional approach to the political economy. :-)

Blissex , December 12, 2017 at 05:41 PM

"the reasons for which we value them are not dependent upon their natural origins or the labor required for their production"

And here be dragons. Your old bearded acquaintance Karl has something to say about this :-).

"It's useful because of what it does, not what it is"

So cleaning floors which is very useful should have a high value, while Leonardo paintings, that are merely scarce, should have a low value :-).

I though that most people reckoned that "value" depends on scarcity: so there is a scarcity of even not very good promoters of torysm, so G Osborne is entitled to £600,000 a year to edit the "Evening Standard", but there is no scarcity of excellent cleaners, so cleaners gets minimum wage if they are lucky.

:-)

Luis Enrique , December 12, 2017 at 05:43 PM

counting hours of worked is not a measure of cost, it is a tally of hours worked. In mainstream econ, production functions describe a physical production process (to make 1 unit of Y, you combine inputs like so) and are not not denominated in money. e.g. You multiply L by w to get cost.

mulp , December 12, 2017 at 05:46 PM

Economies are zero sum. GDP must be paid for, otherwise it won't be produced. The only source of money comes from labor costs, the money paid to workers to work producing GDP. As conservatives note, all taxes fall on workers by directly taking their pay, or by hiking the prices of what workers buy.

Taxes pay workers, e.g. teachers, and doctors with Medicare and Medicaid, weapons makers and warriors, or pay people to pay workers, Social Security benefits and SNAP.

Capital has value because it is built by paying workers. It gets a cut to repay the payers of workers.

Monopoly rent seeking is unsustainable. If a monoplists takes more from workers than they pay workers, he eventually takes so much money workers can no longer pay for GDP and it falls to zero as workers produce what they consume without buying from the monopolist capital.

Tanstaafl

As Keynes put it:

"I feel sure that the demand for capital is strictly limited in the sense that it would not be difficult to increase the stock of capital up to a point where its marginal efficiency had fallen to a very low figure. This would not mean that the use of capital instruments would cost almost nothing, but only that the return from them would have to cover little more than their exhaustion by wastage and obsolescence together with some margin to cover risk and the exercise of skill and judgment. In short, the aggregate return from durable goods in the course of their life would, as in the case of short-lived goods, just cover their labour costs of production plus an allowance for risk and the costs of skill and supervision.

"Now, though this state of affairs would be quite compatible with some measure of individualism, yet it would mean the euthanasia of the rentier, and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital. Interest today rewards no genuine sacrifice, any more than does the rent of land. The owner of capital can obtain interest because capital is scarce, just as the owner of land can obtain rent because land is scarce. But whilst there may be intrinsic reasons for the scarcity of land, there are no intrinsic reasons for the scarcity of capital. An intrinsic reason for such scarcity, in the sense of a genuine sacrifice which could only be called forth by the offer of a reward in the shape of interest, would not exist, in the long run, except in the event of the individual propensity to consume proving to be of such a character that net saving in conditions of full employment comes to an end before capital has become sufficiently abundant. But even so, it will still be possible for communal saving through the agency of the State to be maintained at a level which will allow the growth of capital up to the point where it ceases to be scarce."


Economies are zero sum. The value of goods and services must equal the labor costs in the long run. Tanstaaafl

Blissex , December 12, 2017 at 06:01 PM

"Socialism could still have boring work, but, in so far as the investment function is brought under collective democratic control, workers would not be alienated in the special sense Marx is using."

My impression is that your bearded friend Karl does not use "alienation" in that sense at all, in an economic sense, but in a humanist sense: that by being separated from the means of production proletarians are alienated from the meaning of their work, from work as a human activity, as distinct from an economic activity.

Collective ownership does not change at all that kind of alienation: being a cog in the capitalist machinery is no less alienating than being a cog in the collectivist machinery.

I think that our blogger when he talks about distributing control of the production process to workers is far closer to the marxian ideal than a collectivist approach.

Practically every "Dilbert" strip is about "alienation". This is my favourite:

http://dilbert.com/strip/2002-03-09

But these are also good:

http://dilbert.com/strip/1991-12-26
http://dilbert.com/strip/1993-01-05
http://dilbert.com/strip/1993-04-26
http://dilbert.com/strip/1994-11-07
http://dilbert.com/strip/1996-03-03
http://dilbert.com/strip/1996-07-24
http://dilbert.com/strip/1996-10-10
http://dilbert.com/strip/2002-08-10

Luis Enrique , December 12, 2017 at 06:26 PM

That is not what zero sum means

Blissex , December 12, 2017 at 06:53 PM

"counting hours of worked is not a measure of cost"

For a definition of "cost" that is made-up disregarding P Sraffa's work and in general the classics.

"multiply L by w to get cost."

As J Robinson and others pointed out that "w" depends on the distribution of income, on the interest rate, etc., so is an institutional matter.
As I was saying, accounting for the surplus and how to share it is not so easily handwavable.

Luis Enrique , December 12, 2017 at 08:55 PM

sorry, I meant for a money definition of cost that is not just counting inputs, but which is inputs multiplied by their prices.

nobody is hand waving. I think the mainstream view is that 'value' and 'surplus' are not meaningful terms, only prices and profits and subjective value. A production function says nothing about prices, you have to explain them with other stuff, and as you say, institutions and all manner of things could come in the play there.

You can say that that workers produce more in money terms than than they are paid, which is trivial (the wages paid by an employer are less than its gross profits so long as there are non-zero returns to capital, interest on a loan or dividends or whatever) and to my mind it's silly to define that as exploitation because it would apply in situations where the 'capitalist' is getting a small return and workers rewarded handsomely by any standard. Better imo to define exploitation as when capitalists are earning excess returns (and I'd fudge that by differentiating between workers' wages and salaries of top execs). Otherwise you lay yourself open to "the only thing worse than being exploited by capitlists is not beingn exploited by capitalists" which is J Robinson too I believe.

Luis Enrique , December 12, 2017 at 08:57 PM

and i think you only have to look at the income distribution to infer workers are being expoloited

B.L. Zebub , December 13, 2017 at 04:02 AM

@Blissex,

This is a genuine question: what you exposed above is related to or influenced by Steve Keen's ideas, yes? If so, I'd be interested in reading about that in more detail.

Lukas , December 13, 2017 at 04:28 AM

@Blissex

I've always thought that defining value by scarcity was an absurd misdirection, in part because there is no reason that the two should correlate at all. At any point in socioeconomic development beyond subsistence, value is to some extent socially defined, not economically defined. Status ends up being the most "useful" resource, as we see among all those who've never had to worry about their material conditions.

Placing a high value on the frivolous and "useless" has always been the hallmark of those most able to decide the value of anything, because they have no use for economic use (so to speak), but rather social signaling. Broad social respect is an extremely expensive thing to buy with money alone.

@Luis Enrique

Ah, but name for me a production process that doesn't take place over time. There's an infinite amount of time for all of us, but for each of us only so much, and those who fail to value it die full of regret. Surely someone somewhere must have something to say about this.

Luis Enrique , December 13, 2017 at 08:34 AM

I don't know why I wrote the above. Surplus is also a mainstream term. See wages set by bargaing over a surplus. Presume it's based on prices of outputs compared to inputs or if in model with real quantities not prices, then in subjective values.

Lukas production functions are defined over a period of time.

Blissex , December 13, 2017 at 11:43 AM

Ahem, I am trying to explain my understanding of Marx, who wrote both as economist and a philosopher, and a politial theorist.

Alienation, exploitation and inequality are technically distinct concepts, even if in the marxist (view (and that of every business school, that are faithful to marxist political economy) capitalist control of the means of production leads to alienation which leads to exploitation which leads to inequality. In the marxian political economy inequality can exist even with exploitation, for example, and that makes it less objectionable.

"Surplus is also a mainstream term. See wages set by bargaing over a surplus."

Some Economists have not forgotten at least some terminology of political economy and some Departments of Business still have surviving "history of economic thought" courses that some postgrads may still accidentally occasionally wander into and pick up some terms from...

"are not meaningful terms, only prices and profits and subjective value."

But the mainstream focus on prices and profits etc. is the purest handwaving, because it begs the question...

"A production function says nothing about prices"

Ha! This is one of the best examples where mainstream theory handwaves furiously: mainstream production functions switch effortlessly from "capital" as phusical quantities to aggregating "capital" by reckoning it in "numeraire". That is all about prices, and even about future expected prices and future expected rates of discount. Therefore rational expectations, a grand feat of handwaving.

Blissex , December 13, 2017 at 11:51 AM

"defining value by scarcity was an absurd misdirection, in part because there is no reason that the two should correlate at all."

Ahhhhhhh but this is a very political point and not quite agreeable because:

One of the conceits of "microfoundations" is to show that there are "laws" of Economics that are precise, so everybody get exactly their just compensation, so for example demand-supply schedules are always presented, cleverly, as lines and static.

The view of political economists is that instead "everything" lies within boundaries of feasibility, which are dynamic, so for example demand-supply schedules are ribbons that change over time and circumstances, and transactions happens not at uniquely determined points of intersections, but in regions of feasibility, the precise point dependent on institutional arrangements.

So the LTV determines one boundary for "price" and desirability another boundary.

Blissex , December 13, 2017 at 12:03 PM

"exposed above is related to or influenced by Steve Keen's ideas"

Related and independently derived, but also a bit influenced. I had always suspected that the "classicals" used "labour" as a synonym for "muscle power", but various later readings persuaded me that was indeed the case. Later post will have some hopefully interesting detail. Then I looked into the literature and found that obviously this had been figured out before (centuries ago in some cases, like B de Mandeville).

Anyhow for similar approaches some references:

Luis Enrique , December 13, 2017 at 04:33 PM

Blissex if you can come up with a better way of trying to describe total quantities of highly heterogeneous things (i.e. capital) you have a Nobel awaiting. Everybody know that attempts to put a number on the real quantity of capital is always going to be a rough and ready endeavour.

I don't see how working with prices and profits is 'handwaving'. What question does it beg? Much of economics is about trying to explain these things. I would not say economics focuses on prices and profits because many economics models work with real quantities that are high abstract and in theory are made commensurate using subjective value (utility) as the unit of account.

And I don't think this lot
https://www.theguardian.com/business/2010/oct/11/nobel-prize-for-economics-three-winners
picked up the term surplus by accidentally wandering in to the wrong seminar

[Dec 04, 2017] The Phillips Curve, Again

Dec 04, 2017 | everydayecon.wordpress.com

The Phillips Curve is back. In saying so, I do not mean to imply that being "back" refers to a sudden reappearance of a stable empirical relationship between unemployment (or the output gap) and inflation. The Phillips Curve is back in the same way that conspiracy theories about the assassination of JFK are back after the recent release of government documents. In other words, the Phillips Curve is something that people desperately want to believe in, despite the lack of evidence.

The Phillips Curve is all the rage among central bankers. Since the Federal Reserve embarked on quantitative easing, they have been ensuring the public that QE would not be inflationary because of the slack in the economy. Until labor market conditions tighten, there would be little threat of inflation. Then, as the labor market tightened, the Federal Reserve warned that they might have to start raising interest rates to prevent these tightening conditions from creating inflation.

What is remarkable about this period is that the Federal Reserve has undershot its target rate of inflation throughout this entire period -- and continues to do so today. So what does this tell us about the Phillips Curve and what can we learn about monetary policy?

If one looks at the data on unemployment and inflation (or even the output gap and inflation), you could more easily draw Orion the Hunter as you could a stable Phillips Curve. Fear not, sophisticated advocates of the Phillips Curve will say. This is simply the Lucas Critique at play here. If a Phillips Curve exists, and if the central bank tries to exploit it, then it will not be evident in the data. In fact, if you take a really basic 3-equation-version of the New Keynesian model, there is a New Keynesian Phillips Curve in the model. However, when you solve for the equilibrium conditions, you find that inflation is a function of demand shocks, technology shocks, and unexpected changes in interest rates. The output gap doesn't appear in the solution. But fear not, this simply means that monetary policy is working properly. The Phillips Curve is apparently like the observer effect in quantum mechanics in that when we try to observe the Phillips Curve, we change the actual result (this is a joke, please do not leave comments about why I've misunderstood the observer effect).

... ... ...

What all of this means is that even given the fact that the New Keynesian model features an equation that resembles the Phillips curve, this does not imply that there is some predictive power that comes from thinking about this equation in isolation. In addition, it certainly does not imply that changes in the output gap cause changes in the rate of inflation. There is no direction of causation implied by this one equilibrium condition.

[Nov 29, 2017] Economics is a Belief System - and We are Ruled by Fundamentalists

Highly recommended!
Notable quotes:
"... During the two decades following the neoliberal economists' take-over of Western governments in the 1980s, many felt that the almost mystical terms of economics - such as derivatives, hedging, leverage, contangos, etc - were beyond the understanding of most ordinary people. ..."
"... They pursued them as a matter of faith in the market and its processes, despite the apparent warning signs of their imminent failure. ..."
"... as within many custom or belief systems, what economics enshrines is a social order. One where a dominant minority are able to take a small quantity of wealth from each member of the majority in order to maintain their higher status. ..."
"... idea of economics as an exploitative mechanism is echoed in the cover picture of the book, Bosch's The Conjurer ..."
"... Within its exposition of economics as a quasi-religious theory, Brian Davey's book helps us to understand why economic theory is driving us toward a global system failure - and why politics and economics are incapable of responding to the pressing ecological crisis which the pursuit of economic growth has spawned. ..."
Nov 09, 2015 | resilience.org

by Paul Mobbs, originally published by The Ecologist |

Brian Davey's new book, Credo: Economic Beliefs in a World in Crisis, is an analysis of economic theory as if it were a system of religious belief.

It's a timely book. The simplistic, perhaps 'supernatural' assumptions which underpin key parts of economic theory demand far more attention. It's a debate we've failed to have as a society.

... ... ...

During the two decades following the neoliberal economists' take-over of Western governments in the 1980s, many felt that the almost mystical terms of economics - such as derivatives, hedging, leverage, contangos, etc - were beyond the understanding of most ordinary people.

And without understanding those terms, irrespective of our gut feeling that there was something wrong, how could we challenge the political lobby those theories had put into power? In the end it took the financial crash of 2007/8 to demonstrate that those in charge of this system didn't understand the complexity and risk of those practices either.

They pursued them as a matter of faith in the market and its processes, despite the apparent warning signs of their imminent failure. Those outside 'orthodox' economics could already see where the economy was heading in the longer-term.

Question is, did economists learn anything from that failure? Or, through austerity, have they once again committed us to their dogmatic belief system, unchanged by that experience?

... ... ...

However, through simple hubris or optimism bias, the political class has been convinced that 'fracking' is a solution to our economic woes - even though there is a paucity of verifiable evidence to demonstrate those claims, and it has already lost billions of investors money.

Economics is a reflection of power

Ultimately though, as within many custom or belief systems, what economics enshrines is a social order. One where a dominant minority are able to take a small quantity of wealth from each member of the majority in order to maintain their higher status.

This idea of economics as an exploitative mechanism is echoed in the cover picture of the book, Bosch's The Conjurer - where a magician distracts the public with a sleight of hand trick so that they can be more easily robbed by his associate.

Again, in a world where we're hitting the limits to human material growth, political models of well-being based upon wealth and consumption are damaging to human society in the long-term. The evidence that we're heading for a longer-term failure is there, as was the case with the warning signs before the 2007 crash. The problem is that those in positions of power do not wish to see it.

... ... ...

Within its exposition of economics as a quasi-religious theory, Brian Davey's book helps us to understand why economic theory is driving us toward a global system failure - and why politics and economics are incapable of responding to the pressing ecological crisis which the pursuit of economic growth has spawned.

Contrary to the economic hubris of many world leaders, set alongside the reality of ecological limits humanity is not 'too big to fail'.

[Nov 29, 2017] Michael Hudson: The Wall Street Economy is Draining the Real Economy

Highly recommended!
Notable quotes:
"... An interview by Gordon T. Long of the Financial Repression Authority. Originally published at his website ..."
"... One of the most important distinctions that investors have to understand is the difference between secular and cyclical trends Let us begin with definitions from the Encarta® World English Dictionary: ..."
"... Secular – occurring only once in the course of an age or century; taking place over an extremely or indefinitely long period of time ..."
"... Cycle – a sequence of events that is repeated again and again, especially a causal sequence; a period of time between repetitions of an event or phenomenon that occurs regularly ..."
"... Secular stagnation is when the predators of finance have eaten too many sheeple. ..."
"... Real estate rents in this latest asset bubble, whether commercial or residential, appear to have been going up in many markets even if the increases are slowing. That rent inflation will likely turn into rent deflation, but that doesn't appear to have happened yet consistently. ..."
"... Barter has always existed and always will. Debt money expands and contracts the middle class, acting as a feedback signal, which never works over the long term, because the so encapsulated system can only implode, when natural resource liquidation cannot be accelerated. The whole point is to eliminate the initial requirement for capital, work. Debt fails because both sides of the same coin assume that labor can be replaced. The machines driven by dc technology are not replacing labor; neither the elites nor the middle class can fix the machines, which is why they keep accelerating debt, to replace one failed technology only to be followed by the next, netting extortion by whoever currently controls the debt machine, which the majority is always fighting over, expending more energy to avoid work, like the objective is to avoid sweating, unless you are dumb enough to run on asphalt with Nike gear. ..."
"... . . . The whole argument for privatization, for instance, is the opposite of what was taught in American business schools in the 19th century. The first professor of economics at the Wharton School of Business, which was the first business school, was Simon Patten. He said that public infrastructure is a fourth factor of production. But its role isn't to make a profit . It's to lower the cost of public services and basic inputs to lower the cost of living and lower the cost of doing business to make the economy more competitive. But privatization adds interest payments, dividends, managerial payments, stock buybacks, and merges and acquisitions . Obviously these financialized charges are factored into the price system and raise the cost of living and doing business . ..."
www.nakedcapitalism.com
April 29, 2016 by Yves Smith An interview by Gordon T. Long of the Financial Repression Authority. Originally published at his website

GORDON LONG: Thank you for joining us. I'm Gordon Long with the Financial Repression Authority. It's my pleasure to have with me today Dr. Michael Hudson Professor Hudson's very well known in terms of the FIRE economy to-I think, to a lot of our listeners, or at least he's recognized by many as fostering that concept. A well known author, he has published many, many books. Welcome, Professor Hudson.

MICHAEL HUDSON: Yes.

LONG: Let's just jump into the subject. I mentioned the FIRE economy cause I know that I have always heard it coming from yourself-or, indirectly, not directly, from yourself. Could you explain to our listeners what's meant by that terminology?

HUDSON: Well it's more than just people getting fired. FIRE is an acronym for Finance, Insurance and Real Estate. Basically that sector is about assets, not production and consumption. And most people think of the economy as being producers making goods and services and paying labor to produce them – and then, labour is going to buy these goods and services. But this production and consumption economy is surrounded by the asset economy: the web of Finance, Insurance, and Real Estate of who owns assets, and who owes the debts, and to whom.

LONG: How would you differentiate it (or would you) with what's often referred to as financialization, or the financialization of our economy? Are they one and the same?

HUDSON: Pretty much. The Finance, Insurance, and Real Estate sector is dominated by finance. 70 to 80% of bank loans in North America and Europe are mortgage loans against real estate. So instead of a landowner class owning property clean and clear, as they did in the 19 th century, now you have a democratization of real estate. 2/3 or more of the population owns their own home. But the only way to buy a home, or commercial real estate, is on credit. So the loan-to-value ratio goes up steadily. Banks lend more and more money to the real estate sector. A home or piece of real estate, or a stock or bond, is worth whatever banks are willing to lend against it

As banks loosen their credit terms, as they lower their interest rates, take lower down payments, and lower amortization rates – by making interest-only loans – they are going to lend more and more against property. So real estate is bid up on credit. All this rise in price is debt leverage. So a financialized economy is a debt-leveraged economy, whether it's real estate or insurance, or buying an education, or just living. And debt leveraging means that a larger proportion of assets are represented by debt. So debt equity ratios rise. But financialization also means that more and more of people's income and corporate and government tax revenue is paid to creditors. There's a flow of revenue from the production-and-consumption economy to the financial sector.

LONG: I don't know if you know Richard Duncan. He was with the IMF, etc, and lives in Thailand. He argues right now that capitalism is no longer functioning, and really what he refers to what we have now is "creditism." Because in capitalism we have savings that are reinvested into productive assets that create productivity, which leads to a higher level of living. We're not doing that. We have no savings and investments. Credit is high in the financial sector, but it's not being applied to productive assets. Is he valid in that thinking?

HUDSON: Not as in your statement. It's confused.

LONG: Okay.

HUDSON: There's an enormous amount of savings. Gross savings. The savings we have that are mounting up are just about as large as they've ever been – about, 18-19% of the US economy. They're counterpart is debt. Most savings are lent out to borrowers se debt. Basically, you have savers at the top of the pyramid, the 1% lending out their savings to the 99%. The overall net savings may be zero, and that's what your stupid person from the IMF meant. But gross savings are much higher. Now, the person, Mr. Duncan, obviously-I don't know what to say when I hear this nonsense. Every economy is a credit economy.

Let's start in Ancient Mesopotamia. The group that I organized out of Harvard has done a 20-study of the origins of economic structuring in the Bronze Age, even the Neolithic, and the Bronze Age economy – 3200 BC going back to about 1200 BC. Suppose you're a Babylonian in the time of Hammurabi, about 1750 BC, and you're a cultivator. How do you buy things during the year? Well, if you go to the bar, to an ale woman, what she'd do is write down the debt that you owe. It was to be paid on the threshing floor. The debts were basically paid basically once a year when the income was there, on the threshing floor when the harvest was in. If the palace or the temples would advance animals or inputs or other public services, this would be as a debt. It was all paid in grain, which was monetized for paying debts to the palace, temples and other creditors.

The IMF has this Austrian theory that pretends that money began as barter and that capitalism basically operates on barter. This always is a disinformation campaign. Nobody believed this in times past, and it is a very modern theory that basically is used to say, "Oh, debt is bad." What they really mean is that public debt is bad. The government shouldn't create money, the government shouldn't run budget deficits but should leave the economy to rely on the banks. So the banks should run and indebt the economy.

You're dealing with a public relations mythology that's used as a means of deception for most people. You can usually ignore just about everything the IMF says. If you understand money you're not going to be hired by the IMF. The precondition for being hired by the IMF is not to understand finance. If you do understand finance, you're fired and blacklisted. That's why they impose austerity programs that they call "stabilization programs" that actually are destabilization programs almost wherever they're imposed.

LONG: Is this a lack of understanding and adherence to the wrong philosophy, or how did we get into this trap?

HUDSON: We have an actively erroneous view, not just a lack of understanding. This is not by accident. When you have an error repeated year after year after year, decade after decade after decade, it's not really insanity doing the same thing thinking it'll be different. It's sanity. It's doing the same thing thinking the result will be the same again and again and again. The result will indeed be austerity programs, making budget deficits even worse, driving governments further into debt, further into reliance on the IMF. So then the IMF turns them to the knuckle breakers of the World Bank and says, "Oh, now you have to pay your debts by privatization". It's the success. The successful error of monetarism is to force countries to have such self-defeating policies that they end up having to privatize their natural resources, their public domain, their public enterprises, their communications and transportation, like you're seeing in Greece's selloffs. So when you find an error that is repeated, it's deliberate. It's not insane. It's part of the program, not a bug.

LONG: Where does this lead us? What's the roadmap ahead of us here?

HUDSON: A thousand years ago, if you were a marauding gang and you wanted to take over a country's land and its natural resources and public sector, you'd have to invade it with military troops. Now you use finance to take over countries. So it leads us into a realm where everything that the classical economists saw and argued for – public investment, bringing costs in line with the actual cost of production – that's all rejected in favor of a rentier class evolving into an oligarchy. Basically, financiers – the 1% – are going to pry away the public domain from the government. Pry away and privatize the public enterprises, land, natural resources, so that bondholders and privatizers get all of the revenue for themselves. It's all sucked up to the top of the pyramid, impoverishing the 99%.

LONG: Well I think most people, without understanding economics, would instinctively tell you they think that's what's happening right now, in some way.

HUDSON: Right. As long as you can avoid studying economics you know what's happened. Once you take an economics course you step into brainwashing. It's an Orwellian world.

LONG: I think you said it perfectly well there. Exactly. It gets you locked into the wrong way of thinking as opposed to just basic common sense. Your book is Killing the Host . What was the essence of its message? Was it describing exactly what we're talking about here?

HUDSON: Finance has taken over the industrial economy, so that instead of finance becoming what it was expected to be in the 19 th century, instead of the banks evolving from usurious organizations that leant to governments, mainly to wage war, finance was going to be industrialized. They were going to mobilize savings and recycle it to finance the means of production, starting with heavy industry. This was actually happening in Germany in the late 19 th century. You had the big banks working with government and industry in a triangular process. But that's not what's happening now. After WW1 and especially after WW2, finance reverted to its pre-industrial form. Instead of allying themselves with industry, as banks were expected to do, banks allied themselves with real estate and monopolies, realizing that they can make more money off real estate.

The bank spokesman David Ricardo argued against the landed interest in 1817, against land rent. Now the banks are all in favor of supporting land rent, knowing that today, when people buy and sell property, they need credit and pay interest for it. The banks are going to get all the rent. So you have the banks merge with real estate against industry, against the economy as a whole. The result is that they're part of the overhead process, not part of the production process.

LONG: There's a sense that there's a crisis lying ahead in the next year, two years, or three years. The mainstream economy's so disconnected from Wall Street economy. What's your view on that?

HUDSON: It's not disconnected at all. The Wall Street economy has taken over the economy and is draining it. Under what economics students are taught as Say's Law, the economy's workers are supposed to use their income to buy what they produce. That's why Henry Ford paid them $5 a day, so that they could afford to buy the automobiles they were producing.

LONG: Exactly.

HUDSON: But Wall Street is interjecting itself into the economy, so that instead of the circular flow between producers and consumers, you have more and more of the flow diverted to pay interest, insurance and rent. In other words, to pay the FIRE sector. It all ends up with the financial sector, most of which is owned by the 1%. So, their way of formulating it is to distract attention from today's debt quandary by saying it's just a cycle, or it's "secular stagnation." That removes the element of agency – active politicking by the financial interests and Wall Street lobbyists to obtain all the growth of income and wealth for themselves. That's what happened in America and Canada since the late 1970s.

LONG: What does an investor do today, or somebody who's looking for retirement, trying to save for the future, and they see some of these things occurring. What should they be thinking about? Or how should they be protecting themselves?

HUDSON: What all the billionaires and the heavy investors do is simply try to preserve their wealth. They're not trying to make money, they're not trying to speculate. If you're an investor, you're not going to outsmart Wall Street billionaires, because the markets are basically fixed. It's the George Soros principle. If you have so much money, billions of dollars, you can break the Bank of England. You don't follow the market, you don't anticipate it, you actually make the market and push it up, like the Plunge Protection Team is doing with the stock market these days. You have to be able to control the prices. Insiders make money, but small investors are not going to make money.

Since you're in Canada, I remember the beginning of the 1960s. I used to look at the Treasury Bulletin and Federal Reserve Bulletin figures on foreign investment in the US stock market. We all used to laugh at Canada especially. The Canadians don't buy stocks until they're up to the very top, and then they lose all the money by holding these stocks on the downturn. Finally, when the market's all the way at the bottom, Canadians decide to begin selling because they finally can see a trend. So they miss the upswing until they decide to buy at the top once again. It's hilarious to look at how Canada has performed in the US bond market, and they did the same in the silver market. I remember when silver was going up to $50. The Canadians said, "Yes, we can see the trend now!" and they began to buy it. They lost their shirts. So, basically, if you're a Canadian investor, move.

LONG: So the Canadian investors are a better contrarian indicator than the front page cover, you're saying.

HUDSON: I'd think so. Once they get in, you know the bubble's over.

LONG: Absolutely on that one. What are you currently writing? What is your current focus now?

HUDSON: Well, I just finished a book. You mentioned Killing the Host . My next book will be out in about three months: J is for Junk Economics . It began as a dictionary of terms, so I can provide people with a vocabulary. As we got in the argument at the beginning of your program today, our argument is about the vocabulary we're using and the words you're using. The vocabulary taught to students today in economics – and used by the mass media and by government spokesmen – is basically a set of euphemisms. If you look at the television reports on the market, they say that any loss in the stock market isn't a loss, it's "profit taking". And when they talk about money. the stock market rises – "Oh that's good news." But it's awful news for the short sellers it wipes out. Almost all the words we get are kind of euphemisms to conceal the actual dynamics that are happening. For instance, "secular stagnation" means it's all a cycle. Even the idea of "business cycles": Nobody in the 19 th century used the word "business cycle". They spoke about "crashes". They knew that things go up slowly and then they plunge very quickly. It was a crash. It's not the sine curve that you have in Josef Schumpeter's book on Business Cycles . It's a ratchet effect: slow up, quick down. A cycle is something that is automatic, and if it's a cycle and you have leading and lagging indicators as the National Bureau of Economic Research has. Then you'd think "Oh, okay, everything that goes up will come down, and everything that goes down will come up, just wait your turn." And that means governments should be passive.

Well, that is the opposite of everything that's said in classical economics and the Progressive Era, when they realized that economies don't recover by themselves. You need a-the government to step in, you need something "exogenous," as economist say. You need something from outside the system to revive it. The covert idea of this business cycle analysis is to leave out the role of government. If you look at neoliberal and Austrian theory, there's no role for government spending, and no role of public investment. The whole argument for privatization, for instance, is the opposite of what was taught in American business schools in the 19 th century. The first professor of economics at the Wharton School of Business, which was the first business school, was Simon Patten. He said that public infrastructure is a fourth factor of production. But its role isn't to make a profit. It's to lower the cost of public services and basic inputs to lower the cost of living and lower the cost of doing business to make the economy more competitive. But privatization adds interest payments, dividends, managerial payments, stock buybacks, and merges and acquisitions. Obviously these financialized charges are factored into the price system and raise the cost of living and doing business.

LONG: Well, Michael, we're-I thank you for the time, and we're up against our hard line. I know we didn't have as much time as we always like, so we have to break. Any overall comments you'd like to leave with our listeners who might be interested this school of economics?

HUDSON: Regarding the downturn we're in, we're going into a debt deflation. The key of understanding the economy is to look at debt. The economy has to spend more and more money on debt service. The reason the economy is not recovering isn't simply because this is a normal cycle. And It's not because labour is paid too much. It's because people are diverting more and more of their income to paying their debts, so they can't afford to buy goods. Markets are shrinking – and if markets are shrinking, then real estate rents are shrinking, profits are shrinking. Instead of using their earnings to reinvest and hire more labour to increase production, companies are using their earnings for stock buybacks and dividend payouts to raise the share price so that the managers can take their revenue in the form of bonuses and stocks and live in the short run. They're leaving their companies as bankrupt shells, which is pretty much what hedge funds do when they take over companies.

So the financialization of companies is the reverse of everything Adam Smith, John Stuart Mill, and everyone you think of as a classical economist was saying. Banks wrap themselves in a cloak of classical economics by dropping history of economic thought from the curriculum, which is pretty much what's happened. And Canada-I know since you're from Canada, my experience there was that the banks have a huge lobbying power over government. In 1979, I wrote for the IRPP Institute there on Canada In the New Monetary Order . At that time the provinces of Canada were borrowing money from Switzerland and Germany because they could borrow it at much lower interest rates. I said that this was going to be a disaster, and one that was completely unnecessary. If Canadian provinces borrow in Francs or any other foreign currency, this money goes into the central bank, which then creates Canadian dollars to spend. Why not have the central bank simply create these dollars without having Swiss francs, without having German marks? It's unnecessary to have an intermediary. But the more thuggish banks, like the Bank of Nova Scotia, said, "Oh, that way's the road to serfdom." It's not. Following the banks and the Austrian School of the banks' philosophy, that's the road to serfdom. That's the road to debt serfdom. It should not be taken now. It lets universities and the government be run by neoliberals. They're a travesty of what real economics is all about.

LONG: Michael, thank you very much. I learned a lot, appreciate it; certainly appreciate how important it is for us to use the right words on the right subject when we're talking about economics. Absolutely agree with you. Talk to you again?

HUDSON: Going to be here.

LONG: Thank you for the time.

Donald , April 29, 2016 at 7:33 am

Interesting, but after insulting Duncan, Hudson says the banks stopped partnering with industry and went into real estate, which sounded like what Duncan said.

I mention this because for a non- expert like myself it is sometimes difficult to tell when an expert is disagreeing with someone for good reasons or just going off half- cocked. I followed what Hudson said about the evils of the IMF, but didn't see where Duncan had defended any of that, unless it was implicit in saying that capitalism used to function better.

Alejandro , April 29, 2016 at 9:06 am

Michael Hudson from the interview;

"As we got in the argument at the beginning of your program today, our argument is about the vocabulary we're using and the words you're using. The vocabulary taught to students today in economics – and used by the mass media and by government spokesmen – is basically a set of euphemisms ."Almost all the words we get are kind of euphemisms to conceal the actual dynamics that are happening."

May consider it's about recognizing and deciphering the "doublespeak", "newspeak", "fedspeak", "greenspeak" etc, whether willing or unwitting using words for understanding and clarifying as opposed to misleading and confusing dialectic as opposed to sophistry.

Michael Hudson , April 29, 2016 at 9:54 am

What I objected to was the characterization of today's situation as "financialization." I explained that financialization is the FIRST stage - when finance WORKS. We are now in the BREAKDOWN of financialization - toward the "barter" stage.
Treating "finance" as an end stage rather than as a beginning stage overlooks the dynamics of breakdown. It is debt deflation. First profits fall, and as that occurs, rents on commercial property decline. This is already widespread here in New York, from Manhattan (8th St. near NYU is half empty) to Queens (Austin St. in Forest Hills.).

Leonard C.Tekaat , April 29, 2016 at 12:19 pm

I wrote an article you might be interested in reading. It outlines a tax policy which would help prevent what you are discussing in your article. The abuse of credit to receive rents and long term capital gains.

The title is "Congress Financialized Our Economy And Created Financial Crisis & More Poverty" Go to http://www.taxpolicyusa.wordpress.com

SomeCallMeTim , April 29, 2016 at 5:23 pm

Thank you for another eye-opening exposition. My political economy education was negative (counting a year of Monetarism and Austrian Economics around 1980), so I appreciate your interviews as correctives.

From your interview answer to the question about what we, the 99+% should do,I gathered only that we should not try to beat the market. Anything more than that?

Skippy , April 29, 2016 at 8:33 pm

From my understanding, post Plaza banking lost most of its traditional market to the shadow sector, as a result, expanded off into C/RE and increasingly to Financialization of everything sundry.

Disheveled Marsupial interesting to note Mr. Hudson's statement about barter, risk factors – ?????

Eduardo Quince , April 29, 2016 at 7:41 am

"secular stagnation" means it's all a cycle

Actually not.

One of the most important distinctions that investors have to understand is the difference between secular and cyclical trends Let us begin with definitions from the Encarta® World English Dictionary:

Secular – occurring only once in the course of an age or century; taking place over an extremely or indefinitely long period of time

Cycle – a sequence of events that is repeated again and again, especially a causal sequence; a period of time between repetitions of an event or phenomenon that occurs regularly

Excerpted from: http://contrarianinvestorsjournal.com/?p=405#

cnchal , April 29, 2016 at 8:30 am

Secular stagnation from http://lexicon.ft.com/Term?term=secular-stagnation

Secular stagnation is a condition of negligible or no economic growth in a market-based economy . When per capita income stays at relatively high levels, the percentage of savings is likely to start exceeding the percentage of longer-term investments in, for example, infrastructure and education, that are necessary to sustain future economic growth. The absence of such investments (and consequently of the economic growth) leads to declining levels of per capita income (and consequently of per capita savings). With the reduced percentage savings rate converging with the reduced investment rate, economic growth comes to a standstill – ie, it stagnates. In a free economy, consumers anticipating secular stagnation, might transfer their savings to more attractive-looking foreign countries. This would lead to a devaluation of their domestic currency, which would potentially boost their exports, assuming that the country did have goods or services that could be exported.

Persistent low growth, especially in Europe, has been attributed by some to secular stagnation initiated by stronger European economies, such as Germany, in the past few years.

Words. What they mean depends on who's talking.

Secular stagnation is when the predators of finance have eaten too many sheeple.

MikeNY , April 29, 2016 at 9:57 am

Secular stagnation is when the predators of finance have eaten too many sheeple.

This.

digi_owl , April 29, 2016 at 7:44 am

Sad to see Hudson parroting the line about banks lending out savings

Alejandro , April 29, 2016 at 9:18 am

That's not what he said. Re-read or re-listen, please.

Enquiring Mind , April 29, 2016 at 9:02 am

Hudson says

Markets are shrinking – and if markets are shrinking, then real estate rents are shrinking, profits are shrinking.

Real estate rents in this latest asset bubble, whether commercial or residential, appear to have been going up in many markets even if the increases are slowing. That rent inflation will likely turn into rent deflation, but that doesn't appear to have happened yet consistently.

Perhaps he meant to say that markets are going to shrink as the debt deflation becomes more evident?

tegnost , April 29, 2016 at 9:52 am

I think what it means is it's getting harder to squeeze the blood out of the turnip

Synoia , April 29, 2016 at 10:06 am

What Turnip? Its become a stone, fossilized..

rfdawn , April 29, 2016 at 10:52 am

Yes, I think we are into turnip country now. Figure 1 in this prior article looks clear enough – even if you don't like the analysis that went with it. Wealth inequality still climbs but income inequality has plateaued since Clinton I. Whatever the reasons for that, the 1% should be concerned – where is the ROI?

ke , April 29, 2016 at 10:22 am

Barter has always existed and always will. Debt money expands and contracts the middle class, acting as a feedback signal, which never works over the long term, because the so encapsulated system can only implode, when natural resource liquidation cannot be accelerated. The whole point is to eliminate the initial requirement for capital, work. Debt fails because both sides of the same coin assume that labor can be replaced. The machines driven by dc technology are not replacing labor; neither the elites nor the middle class can fix the machines, which is why they keep accelerating debt, to replace one failed technology only to be followed by the next, netting extortion by whoever currently controls the debt machine, which the majority is always fighting over, expending more energy to avoid work, like the objective is to avoid sweating, unless you are dumb enough to run on asphalt with Nike gear.

ke , April 29, 2016 at 12:49 pm

Labor has no problem with multiwhatever presidents, geneticists, psychologists, or economists, trying to hunt down and replace labor, in or out of turn, but none are going to be any more successful than the others. Trump is being employed to bypass the middle class and cut a deal. There is no deal. Labor is always going to pay males to work and their wives to raise children. Obviously, the majority will vote for a competing economy, and it is welcome to do so, but if debt works so well, why is the majority voting to kidnap our kids with public healthcare and education policies.

meeps , April 29, 2016 at 5:36 pm

I'm not sure I heard an answer to the question of what people, who might be trying to save for the future or plan for retirement, can do? Is the point that there isn't anything? Because I'm definitely between rocks and hard places

Robert Coutinho , April 29, 2016 at 9:29 pm

Yeah, he basically said there is no good savings plan. Big-money interests have rigged the rules and are now manipulating the market (this used to be the definition of what was NOT allowed). Thus, they use computer algorithms to squeeze small amounts out of the market millions of times. This means that the "investments" are nothing of the sort. You don't "invest" in something for milliseconds. He said that the 1% are mostly just trying to hold on to what they have. Very few trust the rigged markets.

ke , April 29, 2016 at 7:22 pm

If Big G can print to infinity, print, but then why book it as debt to future generations?

The future is already becoming the present, because the millenials aren't paying.

Russell , April 29, 2016 at 10:00 pm

Low rent & cheap energy are key to the arts & innovations. My model has to work for airports, starts at the fuel farm as the CIA & MI6 Front Page Avjet did. Well before that was Air America. I wonder if now American Airlines itself is a Front.

All of America is a Front far as I can about tell. Hadn't heard that Manhattan rents were coming down. Come in from out of town, how you going to know? Not supposed to I guess.

I got that textbook and I liked that guy John Commons. He says capitalism is great, but it always leads to Socialism because of unbridled greed.

The frenzy to find another stable cash currency showing in Bit Coin and the discussion of Future Tax Credits while the Euro is controlled by the rent takers demands change on both sides of the Atlantic.

We got shot dead protesting the war, and civil rights backlash is the gift that keeps giving to the Southerners looking up every day in every courthouse town, County seat is all about spreading fear and desperation.

How to change it all without violence is going to be really tricky.

cnchal , April 30, 2016 at 4:36 am

Many thanks for the shout out to Canada.

. . . So, basically, if you're a Canadian investor, move.

LONG: So the Canadian investors are a better contrarian indicator than the front page cover, you're saying.

HUDSON: I'd think so. Once they get in, you know the bubble's over.

When one reads the financial press in Canada, every dollar extracted by the lords of finance is a glorious taking by brilliant people at the top of the financial food chain from the stupid little people at the bottom, but when it counts, there was silence, in cooperation with Canada's one percent.

The story starts about five years ago, with smart meters. Everyone knows what they are, a method by which electrical power use can be priced depending on the time of day, and day of the week.

To make this tasty, Ontario's local utilities at first kept the price the same for all the time, and then after all the meters were installed, came the changes, phased in over time. Prices were increased substantially, but there was an out. If you changed your living arrangements to live like a nocturnal rodent and washed your clothes in the middle of the night, had supper later in the evening or waited for weekend power rates you could still get low power rates, from the three tier price structure.

The local utilities bought the power from the government of Ontario power generation utility, renamed to Hydro One, and this is where Michael Hudson's talk becomes relevant.

The successful error of monetarism is to force countries to have such self-defeating policies that they end up having to privatize their natural resources, their public domain, their public enterprises, their communications and transportation, like you're seeing in Greece's selloffs. So when you find an error that is repeated, it's deliberate. It's not insane. It's part of the program, not a bug .

LONG: Where does this lead us? What's the roadmap ahead of us here?

HUDSON: A thousand years ago, if you were a marauding gang and you wanted to take over a country's land and its natural resources and public sector, you'd have to invade it with military troops. Now you use finance to take over countries. So it leads us into a realm where everything that the classical economists saw and argued for – public investment, bringing costs in line with the actual cost of production – that's all rejected in favor of a rentier class evolving into an oligarchy. Basically, financiers – the 1% – are going to pry away the public domain from the government. Pry away and privatize the public enterprises, land, natural resources, so that bondholders and privatizers get all of the revenue for themselves. It's all sucked up to the top of the pyramid, impoverishing the 99% .

Eighteen months ago, there was an election in Ontario, and the press was on radio silence during the whole time leading up to the election about the plans to "privatize" Hydro One. I cannot recall one instance of any mention that the new Premier, Kathleen Wynne was planning on selling Hydro One to "investors".

Where did this come from? Did the little people rise up and say to the politicians "you should privatize Hydro One" for whatever reason? No. This push came from the 1% and Hydro One was sold so fast it made my head spin, and is now trading on the Toronto Stock exchange.

At first I though the premier was an economic ignoramus, because Hydro One was generating income for the province and there was no other power supplier, so one couldn't even fire them if they raised their prices too high.

One of the arguments put forward by the 1% to privatize Hydro One was a classic divide and conquer strategy. They argued that too many people at Hydro One were making too much money, and by privatizing, the employees wages would be beat down, and the resultant savings would be passed on to customers.

Back to Michael Hudson

. . . The whole argument for privatization, for instance, is the opposite of what was taught in American business schools in the 19th century. The first professor of economics at the Wharton School of Business, which was the first business school, was Simon Patten. He said that public infrastructure is a fourth factor of production. But its role isn't to make a profit . It's to lower the cost of public services and basic inputs to lower the cost of living and lower the cost of doing business to make the economy more competitive. But privatization adds interest payments, dividends, managerial payments, stock buybacks, and merges and acquisitions . Obviously these financialized charges are factored into the price system and raise the cost of living and doing business .

Power prices have increased yet again in Ontario since privatization, and Canada's 1% are "making a killing" on it. There has been another change as well. Instead of a three tier price structure, there are now two, really expensive and super expensive. There is no longer a price break to living like a nocturnal rodent. The 1% took that for themselves.

Procopius , April 30, 2016 at 8:10 am

I am so tired of seeing that old lie about Old Henry and the $5 a day. I realize it was just a tossed off reference to something most people believe for the purpose of describing a discarded policy, but the fact is very, very few of Old Henry's employees ever got that pay. See, there were strings attached.

Old Henry hired a lot of spies, too. He sent them around to the neighborhoods where his workers lived (it was convenient having them all in Detroit). If the neighbors saw your kid bringing a bucket of beer home from the corner tavern for the family, you didn't get the $5.

If your lawn wasn't mowed to their satisfaction, you didn't get the $5. If you were thought not to bathe as often as they liked, you didn't get the $5. If you didn't go to a church on Sundays, you didn't get the $5. If you were an immigrant and not taking English classes at night school, you didn't get the $5. There were quite a lot of strings attached. The whole story was a public relations stunt, and Old Henry never intended to live up to it; he hated his workers.

[Nov 16, 2017] Natural Rate Hypothesis is junk science. There is nothing natural in natural rate of employment

Notable quotes:
"... Controlling inflation solely by focusing on workers wages since 1980 but allowing monopoly power and economic rents to skyrocket since 1980 is the main reason for the extreme inequality that has developed ..."
"... Prima facie evidence of distorted labor market where buyers of labor have control. At the very least, the next democratic President should use their weekly address to point out the metrics relating economic gains, net wealth gains, productivity gains, to wage gains. The Presudent should remind employers to fairly share the gains. Once the metrics indicate distortion in the labor markets the President will then introduce corrective legislation using the public communications weight behind this free market notion of a fair labor market, using these metrics. Let us try this bully pulpit, public communications effort with the idea of building public momentum for correctives, and maybe we will return to the 1960s future when gains were more proportionally shared. Perhaps we wont need much legislation at all, afterall we had one generation comport with fairness, you know, rational expectations. ..."
"... if demand cannot be kept up by wages, then the only option is loans and we have seen in 2008 the catastrophic results of that ..."
Nov 16, 2017 | economistsview.typepad.com

djb , November 16, 2017 at 01:46 AM

non accelerating inflation rate of unemployment is a better term

there is nothing "natural" about that rate

there are many factors that play a role, but the most important are

1. monopoly power is the most important, without monopoly power, in a perfectly competitive market, excessive inflation is not possible

2. factors that affect bargaining power OF workers

Controlling inflation solely by focusing on workers wages since 1980 but allowing monopoly power and economic rents to skyrocket since 1980 is the main reason for the extreme inequality that has developed

Paine -> djb... , November 16, 2017 at 05:18 AM
These are important conjectures

We may indeed have chosen to repress wage rates while allowing Firms market power over output prices and wages.

And firms share of total Economic rents and E rent rates themselves and thus total gross profits to rise.

Largely unchecked by policy moves

JF -> djb... , November 16, 2017 at 08:26 AM
Prima facie evidence of distorted labor market where buyers of labor have control.

At the very least, the next democratic President should use their weekly address to point out the metrics relating economic gains, net wealth gains, productivity gains, to wage gains. The Presudent should remind employers to fairly share the gains.

Once the metrics indicate distortion in the labor markets the President will then introduce corrective legislation using the public communications weight behind this free market notion of a fair labor market, using these metrics.

Let us try this bully pulpit, public communications effort with the idea of building public momentum for correctives, and maybe we will return to the 1960s future when gains were more proportionally shared. Perhaps we wont need much legislation at all, afterall we had one generation comport with fairness, you know, rational expectations.

We can expect to do that again, especially as all new economists will be trained on the why and on how to accomplish this metric of shared gains. One can only hope.

djb -> JF... , November 16, 2017 at 01:59 PM
I know this may not exactly fit your MMT model

if we don't allow median wages to go up to match production/productivity

and if economic rents continue to go up disproportionally then we need to do a redistribution, ideally by taxes, to get the median wage to keep pace with production/productivity

otherwise demand for products will eventually falter, making us all poorer for it

if demand cannot be kept up by wages, then the only option is loans and we have seen in 2008 the catastrophic results of that

[Nov 16, 2017] Should We Reject the Natural Rate Hypothesis

Nov 16, 2017 | economistsview.typepad.com

15, 2017 Should We Reject the Natural Rate Hypothesis? Olivier Blanchard:

Should We Reject the Natural Rate Hypothesis?, by Olivier Blanchard, PIIE : Fifty years ago, Milton Friedman articulated the natural rate hypothesis. It was composed of two sub-hypotheses: First, the natural rate of unemployment is independent of monetary policy. Second, there is no long-run tradeoff between the deviation of unemployment from the natural rate and inflation. Both propositions have been challenged. Blanchard reviews the arguments and the macro and micro evidence against each and concludes that, in each case, the evidence is suggestive but not conclusive. Policymakers should keep the natural rate hypothesis as their null hypothesis but keep an open mind and put some weight on the alternatives. [ paper ]

Posted by Mark Thoma on Wednesday, November 15, 2017 at 10:22 AM in Academic Papers , Economics , Macroeconomics | Permalink Comments (9)


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Paine , November 15, 2017 at 03:44 PM

"there is a strong case, although not an overwhelming case, to allow U.S. output to exceed potential for some time, so as to reintegrate some of the workers who left the labor force during the last ten years."

Blanchard calls for exploring the unknown regions
of lower and lower unemployment

Lower UE rates
Instead of accelerating output price inflation
Or even wage inflation
Given possible productivity pick ups
We may discover
We get a return to higher and higher participation
Not an unhappy result after all

Paine -> Paine ... , November 15, 2017 at 03:49 PM
The parting of the ways with the likes of Blanchard and krugman might come
When at long last wage rates do begin to rise faster then
Say
labor productivity plus three percent

But if the acceleration of the expected rate of change
of the rate of output price change
accelerates slowly

We'll have plenty of policy means and time to moderate the expansion of demand
Given the political will

Paine -> Paine ... , November 15, 2017 at 03:51 PM
Or better consider the imposition of a mark up warrant system
On selected firms and sectors
Paine -> Paine ... , November 15, 2017 at 03:58 PM
What is completely missed by looking at the impact of a slump on long run output capacity
Is the actual lost output out of existing capacity
And the misery this inflicts now
for many too many


Ten years of sub possible output
Contain How many weeks upon weeks
of reduced Welfare for too many souls ?

Paine -> Paine ... , November 15, 2017 at 04:01 PM
If average slack is now 7%
And could
with aggressive macro nautics
be reduced to 2%

We
each of us only live in the now
and for only a single all too brief life time

anne -> Paine ... , November 15, 2017 at 03:58 PM
This is arguing well, I agree and am grateful.
Paine -> anne... , November 15, 2017 at 04:08 PM
Blanchards uses the definition of potential output
That suggests over production has to be off set by under production

I.e. Potential output is not technical maximum output by any means

PO
Is more like a rate of output and consequent rate of existing factor utilization
That does not unduly
stress
the various institutional arrangements and practices
Or overly tax
the stability of existing social norms
Considered necessary
to sustaining the good of society
thru
It's gradual development over time

Paine -> Paine ... , November 15, 2017 at 04:11 PM
There is another set of conflicting visions
One of which
That any class pov might hatch

A vision
Perhaps too Faustian for most souls of that class
That is restless
to push faster
To Venture more
Face uncertainty with boldness even audacity

anne -> Paine ... , November 15, 2017 at 04:11 PM
Nice, nice.

[Nov 04, 2017] Who's Afraid of Corporate COINTELPRO by C. J. Hopkins

Highly recommended!
These tactics do not just suppress information. They enforce conformity at much deeper level.
Notable quotes:
"... I am using the Orwellian verb "unperson" playfully, but I'm also trying to be precise. What's happening isn't censorship, technically, at least not in the majority of cases. While there are examples of classic censorship (e.g., in the UK, France, and Germany), apart from so-called "terrorist content," most governments aren't formally banning expressions of anti-corporatist dissent. This isn't Czechoslovakia, after all. This is global capitalism, where the repression of dissent is a little more subtle. The point of Google unpersoning CounterPunch (and probably many other publications) and Pulitzer Prize-winning journalists like Hedges is not to prevent them from publishing their work or otherwise render them invisible to readers. The goal is to delegitmize them, and thus decrease traffic to their websites and articles, and ultimately drive them out of business, if possible. ..."
"... Another objective of this non-censorship censorship is discouraging writers like myself from contributing to publications like CounterPunch, Truthdig, Alternet, Global Research, and any other publications the corporatocracy deems "illegitimate." Google unpersoning a writer like Hedges is a message to other non-ball-playing writers. The message is, "this could happen to you." This message is meant for other journalists, primarily, but it's also aimed at writers like myself who are making a living (to whatever degree) writing and selling what we think of as "literature." ..."
"... These tactics do not just suppress information. They enforce conformity at much deeper level. ..."
"... Chomsky explains how this system operates in What Makes Mainstream Media Mainstream . It isn't a question of censorship the system operates on rewards and punishments, financial and emotional coercion, and subtler forms of intimidation. Making examples of non-cooperators is a particularly effective tactic. Ask any one of the countless women whose careers have been destroyed by Harvey Weinstein, or anyone who's been to graduate school, or worked at a major corporation. ..."
"... C. J. Hopkins is an award-winning American playwright, novelist and satirist based in Berlin. His plays are published by Bloomsbury Publishing (UK) and Broadway Play Publishing (USA). His debut novel, ZONE 23 , is published by Snoggsworthy, Swaine & Cormorant. He can reached at cjhopkins.com or consentfactory.org . ..."
Nov 04, 2017 | www.unz.com

On November 30, 2016, presumably right at the stroke of midnight, Google Inc. unpersoned CounterPunch. They didn't send out a press release or anything. They just quietly removed it from the Google News aggregator. Not very many people noticed. This happened just as the "fake news" hysteria was being unleashed by the corporate media, right around the time The Washington Post ran this neo-McCarthyite smear piece vicariously accusing CounterPunch, and a number of other publications, of being "peddlers of Russian propaganda." As I'm sure you'll recall, that astounding piece of "journalism" (which The Post was promptly forced to disavow with an absurd disclaimer but has refused to retract) was based on the claims of an anonymous website apparently staffed by a couple of teenagers and a formerly rabidly anti-Communist, now rabidly anti-Putin think tank. Little did most people know at the time that these were just the opening salvos in what has turned out to be an all-out crackdown on any and all forms of vocal opposition to the global corporate ruling classes and their attempts to quash the ongoing nationalist backlash against their neoliberal agenda.

Almost a year later, things are much clearer. If you haven't been following this story closely, and you care at all about freedom of the press, freedom of speech, and that kind of stuff, you may want to take an hour or two and catch up a bit on what's been happening. I offered a few examples of some of the measures governments and corporations have been taking to stifle expressions of dissent in my latest piece in CounterPunch , and there are many more detailed articles online, like this one by Andre Damon from July, and this follow-up he published last week (which reports that Pulitzer Prize-winning journalist and author Chris Hedges has also been unpersoned). Or, if you're the type of soul who only believes what corporations tell you, and who automatically dismisses anything published by a Trotskyist website, here's one from last December in The Guardian , and an op-ed in The New York Times , both of which at least report what Google, Twitter, and Facebook are up to. Or you could read this piece by Robert Parry , who also has "legitimate" (i.e., corporate) credentials, and who hasn't been unpersoned just yet, although I'm sure they'll get around to him eventually.

I am using the Orwellian verb "unperson" playfully, but I'm also trying to be precise. What's happening isn't censorship, technically, at least not in the majority of cases. While there are examples of classic censorship (e.g., in the UK, France, and Germany), apart from so-called "terrorist content," most governments aren't formally banning expressions of anti-corporatist dissent. This isn't Czechoslovakia, after all. This is global capitalism, where the repression of dissent is a little more subtle. The point of Google unpersoning CounterPunch (and probably many other publications) and Pulitzer Prize-winning journalists like Hedges is not to prevent them from publishing their work or otherwise render them invisible to readers. The goal is to delegitmize them, and thus decrease traffic to their websites and articles, and ultimately drive them out of business, if possible.

Another objective of this non-censorship censorship is discouraging writers like myself from contributing to publications like CounterPunch, Truthdig, Alternet, Global Research, and any other publications the corporatocracy deems "illegitimate." Google unpersoning a writer like Hedges is a message to other non-ball-playing writers. The message is, "this could happen to you." This message is meant for other journalists, primarily, but it's also aimed at writers like myself who are making a living (to whatever degree) writing and selling what we think of as "literature."

Yes, as you've probably guessed by now, in addition to writing political satire, I am, as rogue journalist Caitlin Johnstone so aptly put it once, an "elitist wanker." I've spent the majority of my adult life writing stage plays and working in the theater, and it doesn't get any more elitist than that. My plays are published by "establishment" publishers, have won a few awards, and have been produced internationally. I recently published my "debut novel" (which is what you call it if you're an elitist wanker) and am currently trying to promote and sell it. I mention this, not to blow my little horn, but to the set the stage to try to illustrate how these post-Orwellian intimidation tactics (i.e., unpersoning people from the Internet) work. These tactics do not just suppress information. They enforce conformity at much deeper level.

The depressing fact of the matter is, in our brave new Internet-dominated world, corporations like Google, Twitter, and Facebook (not to mention Amazon), are, for elitist wankers like me, in the immortal words of Colonel Kurz, "either friends or they are truly enemies to be feared." If you are in the elitist wanker business, regardless of whether you're Jonathan Franzen, Garth Risk Hallberg, Margaret Atwood, or some "mid-list" or "emerging" author, there is no getting around these corporations. So it's kind of foolish, professionally speaking, to write a bunch of essays that will piss them off, and then publish these essays in CounterPunch. Literary agents advise against this. Other elitist literary wankers, once they discover what you've been doing, will avoid you like the bubonic plague. Although it's perfectly fine to write books and movies about fictional evil corporations, writing about how real corporations are using their power to mold societies into self-policing virtual prisons of politically-correct, authoritarian consumers is well, it's something that is just not done in professional elitist wanker circles.

Normally, all this goes without saying, as these days most elitist wankers are trained how to write, and read, and think, in MFA conformity factories, where they screen out any unstable weirdos with unhealthy interests in political matters. This is to avoid embarrassing episodes like Harold Pinter's Nobel Prize lecture (which, if you haven't read it, you probably should), and is why so much of contemporary literature is so well-behaved and instantly forgettable. This institutionalized screening system is also why the majority of journalists employed by mainstream media outlets understand, without having to be told, what they are, and are not, allowed to report. Chomsky explains how this system operates in What Makes Mainstream Media Mainstream . It isn't a question of censorship the system operates on rewards and punishments, financial and emotional coercion, and subtler forms of intimidation. Making examples of non-cooperators is a particularly effective tactic. Ask any one of the countless women whose careers have been destroyed by Harvey Weinstein, or anyone who's been to graduate school, or worked at a major corporation.

Or let me provide you with a personal example.

A couple weeks ago, I googled myself (which we elitist wankers are wont to do), and noticed that two of my published books had disappeared from the "Knowledge Panel" that appears in the upper right of the search results. I also noticed that the people "People Also Search For" in the panel had changed. For years, consistently, the people you saw there had been a variety of other elitist literary wankers and leftist types. Suddenly, they were all rather right-wing types, people like Ilana Mercer and John Derbyshire, and other VDARE writers. So that was a little disconcerting.

I set out to contact the Google Search specialists to inquire about this mysterious development, and was directed to a series of unhelpful web pages directing me to other unhelpful pages with little boxes where you can write and submit a complaint to Google, which they will completely ignore. Being an elitist literary wanker, I also wrote to Google Books, and exchanged a number of cordial emails with an entity (let's call her Ms. O'Brien) who explained that, for "a variety of reasons," the "visibility" of my books (which had been consistently visible for many years) was subject to change from day to day, and that, regrettably, she couldn't assist me further, and that sending her additional cordial emails was probably a pointless waste of time. Ms. O'Brien was also pleased to report that my books had been restored to "visibility," which, of course, when I checked, they hadn't.

"Whatever," I told myself, "this is silly. It's probably just some IT thing, maybe Google Books updating its records, or something." However, I was still perplexed by the "People Also Search For" switcheroo, because it's kind of misleading to link my writing to that of a bunch of serious right-wingers. Imagine, if you were a dystopian sci-fi fan, and you googled me to check out my book and see what else I had written, and so on, and my Google "Knowledge Panel" popped up and displayed all these far-right VDARE folks. Unless you're a far-right VDARE type yourself, that might be a little bit of a turn-off.

At that point, I wondered if I was getting paranoid. Because Google Search runs on algorithms, right? And my political satire and commentary is published, not only in CounterPunch, but also in The Unz Review, where these far-right-wing types are also published. Moreover, my pieces are often reposted by what appear to be "Russia-linked" websites, and everyone knows that the Russians are all a bunch of white supremacists, right? On top of which, it's not like I'm Stephen King here. I am hardly famous enough to warrant the attention of any post-Orwellian corporate conspiracy to stigmatize anti-establishment dissent by manipulating how authors are displayed on Google (i.e., subtly linking them to white supremacists, anti-Semites, and others of that ilk).

So, okay, I reasoned, what probably happened was over the course of twenty-four hours, for no logical reason whatsoever, all the folks who had been googling me (along with other leftist and literary figures) suddenly stopped googling me, all at once, while, more or less at the exact same time, hundreds of right-wingers started googling me (along with those white supremacist types they had, theoretically, already been googling). That kind of makes sense when you think about it, right? I mean, Google couldn't be doing this intentionally. It must have been some sort of algorithm that detected this sudden, seismic shift in the demographic of people googling me.

Or, I don't know, does that possibly sound like a desperate attempt to rationalize the malicious behavior of an unaccountable, more or less god-like, global corporation that wields the power of life and death over my book sales and profile on the Internet (a more or less god-like global corporation that could do a lot of additional damage to my sales and reputation with complete impunity once the piece you're reading is published)? Or am I simply getting paranoid, and, in fact, I've developed a secret white supremacist fan base without my knowledge? Only Google knows for sure.

Such are the conundrums elitist literary wankers have to face these days that is, those of us wankers who haven't learned to keep our fucking mouths shut yet. Probably the safest course of action, regardless of whether I'm being paranoid or Google does have me on some kind of list, is to lay off the anti-corporatist essays, and definitely stop contributing to CounterPunch, not to mention The Unz Review, and probably also give up the whole dystopian satire novel thing, and ensure that my second novel conforms to the "normal" elitist wanker rules (which every literary wanker knows, but which, technically, do not exist). Who knows, if I play my cards right, maybe I can even sell the rights to Miramax, or okay, some other corporation.

Once that happens, I assume that Google will want to restore me to normal personhood, and return my books to visibility, and I will ride off into the Hollywood sunset with the Clintons, Clooneys, and Pichais, and maybe even Barack Obama himself, if he isn't off jet skiing with Richard Branson, or having dinner with Jeff and MacKenzie Bezos, who just happen to live right down the street, or hawking the TPP on television. By that time, CounterPunch and all those other "illegitimate" publications will have been forced onto the dark web anyway, so I won't be giving up all that much. I know, that sounds pretty cold and cynical, but my liberal friends will understand I just hope all my new white supremacist fans will find it in their hearts to forgive me.

C. J. Hopkins is an award-winning American playwright, novelist and satirist based in Berlin. His plays are published by Bloomsbury Publishing (UK) and Broadway Play Publishing (USA). His debut novel, ZONE 23 , is published by Snoggsworthy, Swaine & Cormorant. He can reached at cjhopkins.com or consentfactory.org .

anonymous , • Disclaimer November 3, 2017 at 12:15 pm GMT

Thank you for mustering the courage and then taking the time to spell out these outrages in a straightforward, unemotional way. I've appreciated the humor that centers your other essays, but there's not a damned thing funny about this.

But why are things as they are? With billions aplenty, our rulers must be driven by their libido dominandi. We're left to wonder only whether they get off more on ostracizing the Hopkinses, on buying the politicians, or on herding the sheep from bathrooms to statues to flags.

[Nov 01, 2017] The Political Organization Men

Notable quotes:
"... The Organization Man ..."
"... What Whyte ran across was the sub-culture of the workplace as followed by those who set themselves upon a "career path" within a specific organization. The stereotypical examples are those, to quote Whyte , "who have left home spiritually as well as physically, to take the vows of organization life. [They adopt an ethic that] rationalizes the organization's demand for fealty and gives those who offer it wholeheartedly a sense of dedication." ..."
"... Today, some private-sector organizations have moved away from the most extreme demands of such conformity, but some other career lines have not, two examples being the military and career party politics. ..."
"... The Power Elite ..."
"... The Organization Man. ..."
"... hose who make their careers within these entities, especially the military and the government, are ideologically conditioned to identify their well-being with the specific goals of their chosen organizations. That means they must bind themselves not only to the goals, but also to the ethics of their workplace. ..."
"... Those who balk are eventually punished and cast out of the organizations. Those who guide these organizations, and essentially decide how rules and ethics will be interpreted and applied, are Mills's "power elite." ..."
"... It may come as a surprise to the reader that party politics as practiced by many of the Western democracies is quite similar. The "power elites" who reside at the top of the so-called greasy pole, holding positions as the head of ruling and contesting parties, are likely to demand the same sort of obedience to orders as any military officer. ..."
"... Rafe explained it this way ..."
"... Leaders of political parties can control their organizations in dictatorial fashion. They have power to reward or punish their party's cohorts in a fashion that can make or break careers. For instance, they control the dispersal of party funds from monies for elections right down to one's office budget; they determine whether a candidate will have to face a primary challenge; they make all committee assignments; they can promote and demote within the party ranks. ..."
"... As Rafe Mair observed, the possibilities for both reward and punishment are almost endless. In this way elected officials become bound to the diktats of their party's leaders. They cannot normally vote their conscience or reliably represent their constituency unless doing so coincides with the desires of their party's leadership. ..."
"... Foreign Policy Inc.: Privatizing America's National Interest ..."
"... America's Palestine: Popular and Official Perceptions from Balfour to Israeli Statehood ..."
"... This is an excellent summary of the basis in mentality of what is factually a 21st century version of a fascist regime. Even though two political parties and the shell forms of republican government may exist, the reality is that the parties are factions and the way things operate is via conformity and loyalty to an authoritarian power structure. ..."
Nov 01, 2017 | consortiumnews.com

Many working-class Americans voted for Donald Trump believing he would address their needs, not those of rich Republicans. But all pols, it seems, end up conforming to their political group's priorities, as Lawrence Davidson explains.

By Lawrence Davidson

In 1956, William H. Whyte published a book entitled The Organization Man about America's societal changes in the post-World War II economy. Basing his findings on a large number of interviews with CEOs of major American corporations, Whyte concluded that, within the context of modern organizational structure, American "rugged individualism" had given way to a "collectivist ethic." Economic success and individual recognition were now pursued within an institutional structure – that is, by "serving the organization."

Whyte's book was widely read and praised, yet his thesis was not as novel as it seemed. "Rugged individualism," to the extent that it existed, was (and is) the exception for human behavior and not the rule. We have evolved to be group-oriented animals and not lone wolves. This means that the vast majority of us (and certainly not just Americans) live our lives according to established cultural conventions. These operate on many levels – not just national patriotism or the customs of family life.

What Whyte ran across was the sub-culture of the workplace as followed by those who set themselves upon a "career path" within a specific organization. The stereotypical examples are those, to quote Whyte , "who have left home spiritually as well as physically, to take the vows of organization life. [They adopt an ethic that] rationalizes the organization's demand for fealty and gives those who offer it wholeheartedly a sense of dedication."

Today, some private-sector organizations have moved away from the most extreme demands of such conformity, but some other career lines have not, two examples being the military and career party politics.

For insight in this we can turn to the sociologist C. Wright Mills , whose famous book The Power Elite was published the same year as Whyte's The Organization Man. Mills's work narrows the world's ruling bureaucracies to government, military and top economic corporations. T hose who make their careers within these entities, especially the military and the government, are ideologically conditioned to identify their well-being with the specific goals of their chosen organizations. That means they must bind themselves not only to the goals, but also to the ethics of their workplace.

Those who balk are eventually punished and cast out of the organizations. Those who guide these organizations, and essentially decide how rules and ethics will be interpreted and applied, are Mills's "power elite."

How this works out in the military is pretty obvious. There is a long tradition of dedication to duty. At the core of this dedication is a rigid following of orders given by superiors. This tradition is upheld even if it is suspected that one's superior is incompetent.

It may come as a surprise to the reader that party politics as practiced by many of the Western democracies is quite similar. The "power elites" who reside at the top of the so-called greasy pole, holding positions as the head of ruling and contesting parties, are likely to demand the same sort of obedience to orders as any military officer.

The Organization Man or Woman in Politics

Running for and holding office in countries like the United States and Canada often requires one to "take the vows of organization life." Does this support democracy or erode it? Here is one prescient answer: the way we have structured our party politics has given us "an appalling political system which is a step-by-step denial of democracy and a solid foundation for a 'soft' dictatorship."

One of the elegant rooms at President Trump's Mar-a-Lago club. (Photo from maralagoclub.com)

Those are the words of the late Rafe Mair , a Canadian politician, broadcaster, author and a good friend of this writer. Rafe spent years in Canadian politics, particularly in his home province of British Columbia, and his experience led him to the conclusion expressed above. How does this translate into practice?

Rafe explained it this way : "In a parliamentary [or other form of representative] democracy the voter transfers his rights to his member of parliament [congressperson, senator or state legislator] to exercise on his behalf – the trouble is, by running for his political party the [elected person, in turn, is led to] assign your [the voter's] rights to the [party] leader for his exclusive use!"

There is no law that makes the elected official do this. However, the inducements to do so are very powerful.

Leaders of political parties can control their organizations in dictatorial fashion. They have power to reward or punish their party's cohorts in a fashion that can make or break careers. For instance, they control the dispersal of party funds from monies for elections right down to one's office budget; they determine whether a candidate will have to face a primary challenge; they make all committee assignments; they can promote and demote within the party ranks.

As Rafe Mair observed, the possibilities for both reward and punishment are almost endless. In this way elected officials become bound to the diktats of their party's leaders. They cannot normally vote their conscience or reliably represent their constituency unless doing so coincides with the desires of their party's leadership.

... ... ...

Lawrence Davidson is a history professor at West Chester University in Pennsylvania. He is the author of Foreign Policy Inc.: Privatizing America's National Interest ; America's Palestine: Popular and Official Perceptions from Balfour to Israeli Statehood ; and Islamic Fundamentalism . He blogs at www.tothepointanalyses.com .

Stephen J. , October 30, 2017 at 9:19 am

I believe we are prisoners of a corrupted "democracy."
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- –
July 13, 2017
The Prisoners of "Democracy"

Screwing the masses was the forte of the political establishment. It did not really matter which political party was in power, or what name it went under, they all had one ruling instinct, tax, tax, and more taxes. These rapacious politicians had an endless appetite for taxes, and also an appetite for giving themselves huge raises, pension plans, expenses, and all kinds of entitlements. In fact one of them famously said, "He was entitled to his entitlements." Public office was a path to more, and more largesse all paid for by the compulsory taxes of the masses that were the prisoners of "democracy."
[more info on this at link below]
http://graysinfo.blogspot.ca/2017/07/the-prisoners-of-democracy.html

Sam F , October 30, 2017 at 11:42 am

Yes, our ertswhile democracy has been completely corrupted. Thanks to Lawrence Davidson, William Whyte, C. Wright Mills, and Rafe Mair for this consideration of the systemic corruption of political parties. The diseases of conformity within party organizations are a nearly inherent problem of democracy.

The improper influence which determines the policies conformed to by parties is the central problem, and stems largely from influence of the economic Power Elite, directing the policies to which the Organization Man must be obedient to be chosen. This distortion can be eliminated by Amendments to the Constitution to restrict funding of mass media and elections to limited individual contributions.

Our problem is that we cannot make such reforms because those tools of democracy are already controlled by oligarchy, which never yields power but to superior force. Talk of justice and peace is not in their language of might makes right, and has no effect whatsoever. They yielded to the 1964 Civil Rights Act only because their fear of riots in the streets led them to pretend that MLK et al had been persuasive.

The foreign wars may be stopped by the defeat, isolation, and embargo of the US by foreign powers. But within the US, the full price of democracy must again be paid the People of the US. The oligarchy must be defeated by superior force: only those who deny enforcement to oligarchy and terrify the rich will bring them to yield any power. That is likely to await more severe recessions and inequities caused by the selfish and irresponsible rich.

mike k , October 30, 2017 at 3:42 pm

You are exactly right Sam F. Unfortunately time is quickly running out for our corrupt "civilization." The time to cultivate and practice wisdom has passed. The sad truth is that our goose is cooked; there will be no cavalry showing up to save us. We are now "eating our karma" and will reap our just deserts. Not because I or anyone say so, but because implacable laws of nature will now play out. Dominant intellectual species occupy a precarious position in planetary evolution, and we are on the verge of a great fall – and all the King's horses and all the King's men will not be able to put our extincting species together again ..

Sam F , October 30, 2017 at 4:11 pm

Your reply touches a responsive chord, in that humanity seems to have made so little permanent progress in its million years or so, mostly in its last few hundred years, an insignificant fraction of planetary history. But the history and literature of temporary progress lost is significant as the repository of ideas for future democracies, at those rare moments when they are designed.

Our diseased society is but one tree in the forest of democracies. The US is or will be like the apparently healthy tree that took down my power lines last night, a pretty red oak with brilliant autumn leaves, but sideways now and blocking the road. But like the leaves on that tree, we can see the problem and still hope to be as happy as this year's leaves on healthier trees.

As in what I like to call the universal mind of humanity, individuals may have foresight and thoughts beyond their apparent functions, which survive in that greater mind of their thoughts recorded or just passed along, and in that way their learning is not in vain.

Drew Hunkins , October 30, 2017 at 10:34 am

Trump did nix out the TPP and did desire a rapprochement of sorts with Moscow. He also regularly asserted that he wanted to re-build American manufacturing in the heartland and wanted to rein in Washington's footprint across the globe. Of course Trump ultimately capitulated to the militarist Russophobes. One can only put so much stock in campaign pronouncements, but he did come off as less bellicose than Killary, that was clear to any fair minded observer.

Trump's also been a nightmare as it comes to workers' rights in general, consumer and environmental protections and fair taxation as it relates to regressive vs progressive rates. He was also an Islamophobe when it comes to Iran and fell right in line with Adelson and the other ZIonist psychopaths.

The most welcoming aspect of Trump was his desire to make peace with Russia, this has been completely sabotaged by the deep state militarists. This is the reason the Corkers, Flakes and much of the establishment mass media browbeat and attack him relentlessly. Most of them ignore what he actually should be admonished for opting for nuclear brinkmanship instead.

exiled off mainstreet , October 30, 2017 at 11:25 am

This is the best description I have seen about Trump's role.

Bob Van Noy , October 30, 2017 at 10:37 am

Thank you CN and Lawrence Davidson for what I think is a accurate explanation of the failure of our Democracy. I especially like the reference to C. Wright Mills who is a heroic character for me. I think Mr. Mill's book on the Power Elite was prescient, as was his thinking in general. He published a little known book "Listen, Yankee" (1960) that was very insightful about the then current Cuban Revolution. It seems in retrospect that there was plenty of warning at the time for America to wake up to the goals of Big Government and Big Business but it was either successfully repressed or ignored by those who might have made a difference, like Labor. At any rate, C. Wright Mills died too early, because he seemed uniquely suited to make a difference. His writing remains current, I'll add a link.

http://www.cwrightmills.org

mike k , October 30, 2017 at 3:47 pm

I am a big CW Mills fan too. We have had many warnings – now we are going to experience the fate of those who ignore wisdom.

tina , October 30, 2017 at 10:31 pm

Hey, college UWM 1984- 1987 Mass Comm, I did not graduate , but we studied Mills, Lewis Mumford, and my favorite, Marshall McLuhan. Also, first time I was introduced to Todd Gitlin and IF Stone. While I did not pursue a life in journalism, I so appreciate all those who did the hard work. I still have all my college required reading books from these people, it is like a set of encyclopedias, only better. And better than the internet. Keep up the work CN , I am not that talented, but what you do is important.

BobH , October 30, 2017 at 12:04 pm

First, let me commend Lawrence Davidson for his selection of two of the most insightful writers of the sixties to use as a springboard for his perceptive essay. A third(John Kenneth Galbraith) would complete a trilogy of the brilliant academic social analysis of that time. Galbraith's masterpiece(The Affluent Society) examined the influence of the heavy emphasis corporate advertising had on American culture and concluded that the economic/social structure was disproportionately skewed toward GDP(gross domestic product) at the expense of educational investment. This was in direct contrast with the popular novels and essays of Ayn Rand, the goddess of greed whose spurious philosophy had come to epitomize the mindset that continues to plague the globe with the neoliberal ideals that have been reinvented under many names over time; i.e. laissez faire, trickle down,the Laffer curve, free market economics and monetarism.

Zachary Smith , October 30, 2017 at 12:17 pm

Usually such claims are themselves no more than campaign hot air. However, in their ignorance, voters may well respond to such hot air, and the result can be a jump from the proverbial frying pan into the fire. U.S. voters seem to have taken just such a leap when they elected Donald Trump president.

Nowhere in this essay are either of the terms "Hillary" or "Clinton" mentioned. U.S. voters had the choice of a known evil on the "D" side of the ballot, or another person well understood to be a shallow, self-centered, rich *****. They were going to end up with an unqualified person either way the voting went. Quite possibly the nod went to Trump because 1) his promises were surely more believable than those of Clinton and 2) Trump wasn't yet the known destroyer of entire nations.

Describing the predicament of the voters as "ignorance" just isn't fair when looking at the overall picture.

mike k , October 30, 2017 at 3:50 pm

Yes. Voters were put in a no win situation. That's why I did not participate in the "show" election.

Realist , October 31, 2017 at 4:33 am

What were Obama's reasons for failing to take a stand, once elected, on all the promises he made during his campaigns? He mostly gave away the store to the other side, and insulted his supporters while doing so. Talk about progressives not getting a "win" even after carrying the elections. Two terms earlier, the media called the contest one of two "moderates" between Bush and Gore. If that was "moderation" practiced by Dubya, I need a new dictionary. Most recent elections have been pointless, especially when the Supreme Court doesn't allow a complete recount of the votes. In a field of 13(!) primary candidates last year, the GOP could not provide one quality individual. The Dems cheated to make sure the worst possible of theirs would get the nomination. I see nothing but mental and moral midgets again on the horizon for 2020. I don't expect Trump to seek re-election. He will have had a bellyful should he even survive.

Stephen J. , October 30, 2017 at 12:23 pm

I believe what has happened to all of us is: "The Imposition of a New World Order." This plan has been helped by puppet politicians. Therefore the question must be asked: "Is There An Open Conspiracy to Control the World'?
[More info on this at link below]
http://graysinfo.blogspot.ca/2014/12/is-there-open-conspiracy-to-control.html

john wilson , October 30, 2017 at 1:00 pm

Stephen: why do you ask the question to which you already know the answer? Yes, we're all screwed and have been for years. The bankers already control the world and the military make sure its stays that way.

Stephen J. , October 30, 2017 at 1:44 pm

Very true john wilson. Questions beget answers and information.
cheers Stephen J.

mike k , October 30, 2017 at 3:52 pm

It's like the Purloined Letter by Poe – the truth of our enslavement is so obvious, that only the deeply brainwashed can fail to see it.

Zachary Smith , October 30, 2017 at 12:48 pm

The parts of The Organization Man I found most interesting were the chapters about "Testing The Organization Man". The companies were deliberately selecting for people we currently label Corporate Psychopaths. Whyte suggested memorizing some "attitudes" before taking one of the tests. Among them:

I loved my father and my mother, but my father a little bit more
I like things pretty much the way they are
I never worry much about anything
I don't care for books or music much
I love my wife and children
I don't let them get in the way of company work

You can substitute any number of things that you won't allow to get in the way of company work .

Ecology. Laws. Regulations. Integrity. Religion.

"Screw planet Earth. Exxon comes first!" Or "screw Jesus and the horse he rode in on. We need to cut taxes and balance the budget. People are poor because they're too lazy to get a job."

mike k , October 30, 2017 at 3:53 pm

Good points. Brainwashing in action revealed.

john wilson , October 30, 2017 at 12:55 pm

Democracy is another word for consensual slavery. In a communist system or a dictatorship etc you are told you are a slave because you have no voice or choice. In a democracy you do have a choice and its between one salve master and another. If you vote Democrat you are just as much a slave to the system as you are if you vote Republican. The possibility of a third choice which might just free you from your chains, is a fantasy and only there as window dressing to give democracy some credibility. The term for this dilemma is called being TOTALLY SCREWED!!

mike k , October 30, 2017 at 3:55 pm

Amen John. You got it right brother.

exiled off mainstreet , October 31, 2017 at 11:01 am

This is an excellent summary of the basis in mentality of what is factually a 21st century version of a fascist regime. Even though two political parties and the shell forms of republican government may exist, the reality is that the parties are factions and the way things operate is via conformity and loyalty to an authoritarian power structure.

[Oct 27, 2017] The Rise and Fall of the Phillips Curve by Ed Walker

Notable quotes:
"... The History of the Phillips Curve: Consensus and Bifurcation ..."
"... The Fed Has a Theory. Trouble is the Proof is Patchy ..."
"... Do Phillips Curves Conditionally Help to Forecast Inflation? ..."
"... Declining Labor and Capital Shaes ..."
"... I am constantly baffled by economists trying to explain very complex non-linear system with simple two variable models. I have been dealing with a couple of engineering problems today where the publication I am using has over 50 design charts just for gravity pipe flow. Each chart has about five variables accommodated while holding a number of others constant. ..."
"... So I think we see the Philips curve predictably happening in the short-term in fields like technology where there is big demand and not enough people. However, as a general rule across the economy, I simply don't see why the relationship between inflation and unemployment should be the same today as it was in 2007, 1997, 1987, or 1977. ..."
"... Economics is infected with too much ideology and not enough scientific method. That is more the definition of a religion than a science. ..."
"... If neoliberals were intellectually honest, they wouldn't call it supply side economics, they'd call it philo-capital economics ..."
"... 80's Poly-Sci defined, "neo-feudalism" (or, as "Shock Doctrine", privatization of all "resource" + government capacity, subject financial sector capture) ..."
"... As far as I can tell, the whole idea of NAIRU is strictly an artifact of economic modeling, not something that's actually ever been observed in the wild. And doesn't it seem odd that making sure we don't drop below NAIRU is something the Fed feels like it needs to intervene to ensure rather than letting the market sort it out. Even if NAIRU was a real thing, you would assume that low unemployment –> increased wages –> increased prices –> reduced consumption –> lay-offs and higher unemployment. Which is to say, if there were such a thing as a natural rate of unemployment, wouldn't markets naturally produce it, obviating any need for the Fed to, say, jack up interest rates to keep the economy from "heating up" (I guess because people have so much money burning holes in their pockets?). It almost like, when it suits the capitalists, they stop believing in this whole "invisible hand" thing .strange ..."
"... "Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning. ..."
Oct 27, 2017 | www.nakedcapitalism.com

The Rise and Fall of the Phillips Curve Posted on October 27, 2017 The Phillips Curve says that there is an inverse relation between unemployment and inflation. Low unemployment is correlated with a rise in inflation. It's an article of faith to economists of all stripes. It's listed in the popular introductory economics textbook by N. Gregory Mankiw as one of the Ten Things All Economists agree on . It's especially loved by the Fed, which raises or lowers interest rates depending in part on its predictions. Its critics point out that its predictions are poor.

In this post, I discuss the derivation of the Phillips Curve, its adaption by Samuleson and Solow to manage the economy, its breakdown in the 1970s, exploitation by neoliberals of that breakdown to replace Keynesian demand-based economics with monetarism and supply-side economics, its rejuvenation, and the evidence that it doesn't make accurate predictions.

I conclude with some observations based on an important paper by Simcha Barkai that challenges the core beliefs of neoliberalism. It suggests we can raise wages substantially without causing inflation by lowering corporate profits.

History

This part is based on Sections I-III of Robert Gordon's article, The History of the Phillips Curve: Consensus and Bifurcation , Economica (2011) 78, 10–50 (behind paywall, but you can find it online at your local library). Gordon is an economics professor at Northwestern and has worked on the Phillips Curve for decades.

William Phillips published a paper in 1958 showing a correlation between wage growth and inflation in the UK between 1861 and 1913. He fitted a curve to the data, and then compared that curve to UK data from two later periods. There was a remarkable similarity for most of the two periods, with exceptions Phillips explains away. Here is the curve Phillips derived:

1. w t = -.90 + 9.64U -1.39

Gordon says that " the inflation rate would be expected to equal the growth rate of wages minus the long-term growth rate of productivity." P. 12.

1a. p = w – k

Here p is inflation, w is wage growth, and k is productivity growth. Generally in these equations, lower case letters are rates of change and upper case letters are levels. We can substitute Equation 1a into Equation 1 to get the original Phillips Curve.

2. p = -.90 + 9.64U -1.39 – k.

Paul Samuelson and Robert Solow picked up on the Phillips paper with a paper of their own in 1960. Gordon says much of their paper is a discussion of pre-Phillips theory. They can't find data on the US economy similar to that found by Phillips for the UK economy, so they work up some of their own data and make some calculations showing a result similar to that of Phillips. Whereas Phillips does not mention the possibility that the curve might shift, Samuelson and Solow find such shifts and offer possible explanations, such as strong labor unions.

Here's a schematic drawing of the Phillips Curve from Wikipedia :

The standard curve might be the one on the left. It shows very high inflation at very low unemployment, but falls quickly as unemployment rises. That suggested to Samuelson and Solow that there is a trade-off if the economy is in specific parts of the Phillips Curve: by allowing a slightly higher level of inflation, you could get a big drop in unemployment. The US tried this idea in the 1960s. This policy was tied to Keynesianism, which was the predominate theory in the Kennedy and Johnson era, and into the Nixon Presidency.

When OPEC massively increased the price of oil in the early 70s, inflation soared far past the level suggested by the Phillips Curve. The neoliberals at the University of Chicago argued that the failure of the Phillips Curve proved that Keynesian economics was worthless, and pushed their solution: monetarism. They also had a formula to replace the Phillips Curve as a predictor of inflation.

Their explanation for the failure of the trade-off was something like this. Suppose the beginning rates of inflation and unemployment are at Point A on the above chart. The Fed lowers interest rates resulting in a small increase of inflation, so that the economy moves to Point B with lower unemployment. People believe that is unsustainable, and that the economy will revert to the natural rate of unemployment, the vertical line. As a result, the Phillips Curve shifts up and to the right over time, so that the economy moves to Point C, with the beginning unemployment rate but higher inflation.

The neoliberals won. Keynesia