R Lucas and Ideas

Even assuming that knowledge—and, more importantly, the aggregation of knowledge—attract both labor and capital; we might still want to ask: first, what kind of knowledge? and, second, who or what is the gate-keeper?

R Lucas and the Historical Specificity of Development

The law of diminishing returns gives a reasonable explanation both of why there are so many people per square mile in the lush plain of Bengal, compared to the tundra of northern Canada, and also of why living standards are about the same in these two places . . . If the new technology was embodied in new machines or in expert Englishmen, why did these machines and experts not go abroad, to be combined in production with inexpensive foreign labor rather than with expensive English workers? (Lectures on Economic Growth, 3)

R Lucas is fully capable of thinking through geographical and even demographic differences—note the example, middle of page three, from Bengal and Canada. But will he be able to articulate the roles that nationalism, imperialism, and politics play in the reasons that machines and experts not only failed to find there way to all shores in the Empire, but may not have been welcomed on these shores—by British investors, by local oligarchs—even assuming they could have made this journey?

The story R Lucas will have to tell, however, will not concern local oligarchs, nationalism, or imperialism; he is developing a model of development.

What Was Karl Marx’s Principal Contribution? – Brad DeLong’s Grasping Reality with All Ten Tentacles

What Was Karl Marx’s Principal Contribution? – Brad DeLong’s Grasping Reality with All Ten Tentacles

Before responding to B DeLong’s very abbreviated thoughts about K Marx and his contribution, I have to plead ignorance to the events or postings that might have provoked it. Did I know these events or postings, I might have a better understanding of why Mr DeLong foregrounds the points he does while backgrounding others.

And, yet, there is considerable value in taking Mr DeLong at his word; this, in his view, was Karl Marx’s principal contribution.

First, I appreciate all attempts, and not simply B DeLong’s, to seat theory in history, where it belongs. This habit of mind, in fact, may be among K Marx’s leading contributions. To be sure, GFW Hegel paved the way for this habit, exploring how it was possible for Mind (which is subject to change) to grasp the historical conditions of its own possibility. But, where Hegel ends up in much the same place as I Kant, with universally valid objectivity, K Marx proposes a much more modest (and, transcendentally, much less satisfying) intermediate place: the adequacy of thought to its own socio-historically specific conditions of possibility.

Marx was therefore not nearly as troubled as later Marxists would be in admitting both that he made use of the interpretive categories of the “bourgeois economists,” and that these (and all) interpretive categories lacked universal validity.

What is troubling about Mr DeLong’s seating of K Marx historically, is that this particular positioning tells us very little either about Marx or about his interpretive categories. For example, it tells us next to nothing of the path that led from him a fairly pedestrian philosophy of subjectivity a la’ GFW Hegel, to a more nuanced and precarious neo-Aristotelian philosophy of freedom and necessity. Mr Marx was not nearly the dilettante suggested by Mr DeLong, flying from one theoretical vantage point to the next, without serious critical reflection along the way.

Indeed, it could be suggested (I would suggest) that he proved a poor British political economist because his (increasingly) historically grounded theory of subjectivity did not allow him to universalize and transhistoricize “human nature” in the sloppy, unnuanced manner then common among British political economists.

Second, I believe that Marx’s post-1848/49 adjustment, to which Brad refers, might be welcomed among economists today, many of whom (present company excluded) appear perfectly happy to stick by their theory irrespective of political, economic, or social changes.

Finally, however, it strikes me that Mr DeLong may be gauging K Marx’s contribution on how much (or little) of his theory has been incorporated into contemporary economic or political economic reflection. That is certainly a valid standpoint.

There are, however, risks that follow from taking this standpoint too far. Departments and disciplines tend to be very incestuous, and risk growing even more incestuous the greater the similarities are among the ever smaller range of interpretive frameworks entertained within a field.

A great many Marxian and post-Marxian economists have made significant contributions over the past twenty-five years—and not simply to the theory of value—that will never be considered by members of Economics Departments; and this for the (I believe) insufficient reason that the interpretive categories deployed in these departments are too narrow, self-referential, and historically ungrounded to accommodate them.

Be that as it may, I appreciate that B DeLong took the time to collect some thoughts about Marx’s contribution and so provoke others to do the same.

CBC.ca | As it Happens | Tuesday, April 5, 2011

 

CBC.ca | As it Happens | Tuesday, April 5, 2011

If you missed the CBC’s interview with Donna Marsh O’Conner this evening, you should follow the link and listen to the segment. Ms. O’Conner lost her daughter in the 9/11 attack on the World Trade Center.

In this interview, she expresses regret that Khalid Sheik Mohammed will not be tried according to the rule of law under the US Constitution, but according to military law, where guarantees of Due Process and Habeas Corpus are, at best, questionable.

Much more eloquently than I could, Ms. O’Conner identifies the ways that Attorney General Holder and President Obama caved into political pressure from Republican politicians to suspend the rule of law and Due Process.

For the purposes of our studies this semester, Ms. O’Conner’s spirited defense of Republican institutions and values is packed with significance. At the very least it places the primacy of the political (think Carl Schmitt) over the rule of law at center stage, not simply in the pressure placed on Holder and Obama by Republicans, but on Obama’s own political calculation that it could be a mistake to mount a reelection campaign with this issue haunting him in the background. Both calculations are strictly political.

But, Ms. O’Conner’s statement also foregrounds the increasingly tenuous character of the rule of law for a political community whose participants are increasingly ignorant and dismissive of (or even hostile toward) the founding principles of their own constitution.

Finally, the interview suggests that post-democratic society is fully compatible with political actors who become increasingly sensitive to the mass character of public sentiment and not by law or reason.

Backstory Of A Revolution: Studying Tweets, Posts : NPR

 

Backstory Of A Revolution: Studying Tweets, Posts : NPR

MAZEN NAHAWI suggests that social media promotes the habit of democracy because it habituates users to the practice of expressing their likes/dislikes and preferences. If this is what Mr. Nahawi—from New Group International—is suggesting then what kind of democracy does social media habituate users for?

Could we have democracy via focus groups? Could we have democracy via product choice/selection?

What I find interesting about this story is the connection that Mr. Nahawi draws between market choice or consumer preference and political action and/or institutional transformation. It strikes me that either the latter will assume a form similar to the initial practice, OR that there are a few steps missing, such as, what Egyptian youth were tweeting about, how did they envision free institutions or political practices, etc.

That is to say, Mr. Nahawi appears to reduce democracy to a formal system and to bracket content.

R Lucas and the Value of Learning

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Again, I am wondering whether R Lucas’ model can accommodate a circumstance where the cost of acquiring a skill or knowledge—let us say in history or in literature—far outweighs the enhancement this skill or knowledge will bring to future earnings?

I am not only concerned about the kind of society is R Lucas imagining; it is the society that in fact exists. Rather, I am concerned about whether it is only in such a society as this that the models he is deploying hold validity and, therefore, whether the assumptions he is making hold good only because in this society social actors are compelled to act economically.

R Lucas and the Cost-Minimizing Household

 

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Are we to conclude from this first assumption that this household is a cost-minimizing economic unit?

I am currently having my kitchen floor re-tiled. Paul Davis, my contractor, pointed out that, while the tile I chose was “greener” than the others, it would cost more to lay because it required specially-certified laborers. I pointed out that the price would come down, eventually, when more households elected to lay the “greener” tile than the more common, and more carbon-inefficient, tiles.

First, was I correct? And, second, can R Lucas’ model accommodate households such as mine that make a broad range of decisions based on value sets that are not economic?

T Frank’s Thesis

Toward the end of class a discussion began to take shape over whether government institutions should be held to a metric of economic efficiency to measure their success. I was suggesting that the success of a program or agency should be measured by how effectively in fulfills its legislative mandate, e.g., how effectively the environmental protection agency protects the environment, how effectively the department of education educates K-12 public school children, etc.

Mr. Kil’s suggestion—that public and private are always inevitably locked in a struggle for scarce resources—needs to be taken seriously. Should not economic efficiency provide at least part of the rationale for the success of public institutions?

My answer is that economic efficiency should provide at least part of the rationale, if (weak), and only if (strong), economic efficiency is among the criteria of measuring the success of a legislative mandate. Thus, for example, it makes perfect sense for economic efficiency to be included in the criteria measuring the success of recovering penalties from corporations that conceal capital gains from the government. It also may make sense to make economic efficiency a criteria for bidding for public projects (quality and timeliness of project completion relative to cost).

However, if a legislative mandate is passed for, let’s say, ensuring that public schools are adequately funded—including a set of reasonable achievement-based benchmarks backed by sound research—then does it make sense to fold economic efficiency into these achievement-based criteria? No one doubts that we can “educate” children for less. Questions arise when the verb “to educate” is held to represent a clearly-defined set of skills and knowledge whose conditions bear a price-tag above the “market rate” for education delivery systems.

Over two millennia ago, Aristotle already identified the slippery slope down which we begin to slide when (his examples) courage, or medical capability, or winning a war are subjected to an economic metric. Everything does have a price. But some things are still “priceless,” notwithstanding Gary Becker’s objections to the contrary.

M Friedman Capitalism and Freedom

One of the leading insights I hope that students take home from their reading of Capitalism and Freedom is that M Friedman and A Bloom for all of their apparent differences come to much the same position respecting the risks that democratic institutions pose to the free market.

A Bloom comes to this position by way of his classical studies. Had political leaders (the Guardians) of Germany been more circumspect, they would have recognized that true wisdom cannot arise from history, but arises only from reason itself, and therefore would never have allowed the demos to overrun the polis. Not only do the events in mid-twentieth century Germany provide a modern illustration, for A Bloom, of a lesson Plato learned from the death of his mentor, Socrates, at the hands of Athens’ citizens, but these events also prefigure the rise in the 1960s of a popular movement that in similar manner would subject the mechanisms of the state to a politics built upon identity and passion (as opposed to universality and reason).

M Friedman comes to much the same point. When self-interested political leaders (not unlike Pericles) attempt to preserve their political power by giving in to political pressure exercised by marketplace “losers,” they undermine the very mechanisms of freedom itself. The surest insurance for freedom, therefore, is protection of the free marketplace from outside interference, whether that interference comes from business interests (in the form of monopoly) or public interests (in the form of government taxation and regulation).

In both instances, the demos, as embodied in political representatives, is cast as a threat to freedom.

Perhaps the question we need to raise is whether, on the one hand, M Friedman would object to A Bloom’s solution to this problem (de facto rule by self-selecting Guardians whose secret rule protects the possibility of successor Guardians to be identified, nurtured, and prepared for rule); and whether, on the other hand, A Bloom would object to M Friedman’s solution to this problem (limited and dispersed government empowered only to ensure that monopoly power is kept to a minimum and that no party to an economic transaction is forced or tricked into the transaction against their wishes, but N.B., not necessarily against their best interests).

My best guess is that M Friedman and A Bloom would find no fundamental disagreement with one another on these two interrelated solutions, clearing the way for what G Steinmetz has called “authoritarian post-Fordism.”

D Harvey Uneven Geographical Developments

The result was that even when the Social Democrats returned to power in 1994, the neoliberal programme of ‘deficit reduction, inflation control and balanced budgets rather than full employment and an equitable distribution of income became cornerstones of macroeconomic policy’.

Should/could the Social Democrats have pursued this neo-Keynesian policy-line in light of the neoliberal turn in the US, the UK, China, and in most of the developing world? The question is not only one of principle, but one of practicality. “Full employment and equitable distribution of income” worked so long as the leading international financial institutions were on board with the global mission of democracy, social stability, and economic growth. But now that this was no longer the global mission, is it at all possible for one country to pursue the high road, while the majority (and the most powerful) are locked in a headlong race to the bottom?

Could Swedish industry have maintained high wages, benefits, and taxes, but remained competitive on the world market? Be careful how you answer this question. Surely they could not if investors in Swedish industry were simply looking for a place to park their capital and receive the highest returns on their investment. They would best do this elsewhere. But let us assume—as the Social Democrats had argued a decade earlier—that Sweden continues down the path to socialization of production. In this case, national investment in public industry could go hand-in-hand with competitive prices on the global market.

So, could or should the Social Democrats have succeeded in this strategy?