Bob Cropf

Posts Tagged ‘Marxian’

Marx would have approved of banks bail-out

In economics, Free-market on February 20, 2009 at 8:58 AM

This tongue-in-cheek article in the Financial Post, a Canadian online publication, makes the case that Karl Marx would have endorsed last year’s bailout of the US financial sector. According to the article, Marx would have joined such stalwarts of conservative economic thought as the Heritage Foundation and the Wall Street Journal’s editorial page in applauding the $700 billion bank bailout. As we have often said in class, sometimes the current crisis makes for some interesting bed fellows.

The article itself presents a fairly standard neo-classical argument against the bailout. It goes on to say:
“At first glance, anyone who understands economics can see that there is something wrong with this picture. The taxes that will need to be levied to finance this package may keep some firms alive, but they will siphon off capital, kill jobs and make businesses less productive elsewhere. Increasing the money supply is no different. It is an invisible tax that redistributes resources to debtors and those who made unwise investments.
So why throw this sound free-market analysis overboard as soon as there is some downturn in the markets? ”

The author, who is a free-market Canadian journalist, is probably thinking that somewhere Milton Friedman is spinning in his grave.

End of capitalism?

In economics, public finance on February 13, 2009 at 8:32 PM

Fascinating interview with social thinker Immanuel Wallerstein to be found here. Wallerstein is not an economist but is a highly respected social thinker. This is the first time I’ve heard of Jae-Jung Suh, who is his interviewer.

Wallerstein makes several provocative statements during the course of the interview, such as the following:
“I think U.S. hegemony has been in decline ever since that time. I analyze these things in terms of what are called Kondratieff (Kondratiev) phases, and we entered a Kondratieff B phase at about that time. The world economy has been in relative stagnation for 30 years. ”

“The second thing that happens when you have a Kondratieff B phase is that people who want to make a lot of money shift to the financial sphere; basically, speculation through debt mechanisms of various kinds.”

“There is a crisis of the capitalist system, that is to say we have the conjuncture of normal downturn processes. What I think of as the fundamental crisis of the system is such that I don’t think the system will be here 20 or 30 years from now. It will have disappeared and been completely replaced by some other kind of world system.”

“We can have a system better than capitalism or we can have a system that is worse than capitalism. The only thing we can’t have is a capitalist system. Now, I have given you a short version of the whole argument.”

All in all, the interview makes for fascinating, if a little dense, reading. Note that Wallenstein is not stating that capitalism’s demise, as he sees it,will lead to a Marxist future. He does not predict what will happen. He simply says the world order will be different from the one that has dominated the world for the last 100 or so years.

BC

A Marxian take on the financial crisis

In economics on January 31, 2009 at 9:44 AM

I came across this blog post today. I skimmed it and thought it looked rather interesting in light of our class discussion last week. In particular, pay close attention to what the writer says is the importance in Marxian analysis of the word, “crisis.” Recall O’Connor’s use of the word in his article. What is being conveyed is the idea of a complete breakdown in confidence. In a capitalist economy, confidence is key (you don’t have to read Marx to believe that). Therefore, if there is a lack of confidence or declining confidence then things can go south pretty fast. That’s what happened according to the Marxian viewpoint. The conclusion is pretty scary if you believe the writer: We’ve come to the point where we are not trying to save either the poor or the rich, but the system itself! As you read this, think about how a Neo-classical of Keynesian might respond. Do you think they would predict a complete and total collapse of the entire system as readily? How would they challenge the Marxian perspective on the data?

Greetings

In statistics on January 23, 2009 at 6:27 PM

Welcome students. The readings for next week are Friedman and O’Connor in the Peretz book. Think about how each author approaches the question of the government’s role in the economy. In some ways, both authors view the government as a threat but for different reasons…why?

How would you classify each author based on the categories discussed in class 2 weeks ago (interventionist, nonintervensionist, Marxian)? Why? How would each one view the type of fiscal stimulus package being considered by the Obama administration?

Useful Links
Milton Friedman’s Wikipedia entry
James O’Connor’s Wikipedia entry
Amazon.com’s review of O’Connor’s Fiscal Crisis of the State.
Milton Friedman on Charlie Rose

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