Transcript history of economics in painting

Peaks, Valleys, and Points of View
But once the frog and fly populations start doing their stuff to each other,
once the fitness landscape of each begins to deform as the other
population moves on its own landscape, all bets are off. Neither
population may ever come to rest on fitness peaks, for those peaks
themselves may keep moving, and the adapting population may keep
chasing peaks that forever elude them. Coevolving systems, thus, do not
have a potential function. Mathematicians recognize such coevolving
systems as general, complex, dynamical systems.
Stuart Kauffman. At Home in the Universe. The Oxford University Press 1995, p. 222)
So what if our dialogs reflect
coevolving systems? And our peaks
and valleys are flipped? …by the
invisible hand? … about every 10
years.
A painting of economic history
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FLIPPABLE ECONOMICS
Economic “Science” is completely flippable on the basis of the latest
Experience. The painting starts with the believers in laissez-faire right side
up, but 2008 turns the economy, the painting, and the laissez-faire
economists upside down. In fact the painting captures the precise moment
when the head of the Fed (Greenspan) and the President of the United
State (Bush) find their laissez-faire policy achieving the greatest
intervention by the government (partial nationalization of GM, Chrysler,
AIG, and the major banks) of all time. So upside down, they are almost
totally right side up. Presto! Flippable chief executives who, when you hear
what they do- not what they say-are pro-government interventionists. They
are flipped by the cascading economy represented by the avalanche off of
the mountain, K-10. Flipped, they now have to ascend the greater heights.
The diminishing returns guaranteeing the stability of their equilibrium in the
laissez-faire has become the increasing returns of creatively destroyed
equilibrium faced by the interventionists. With the flip of a picture the
convexity of the avalanche becomes concavity, and concavity becomes
convexity.
The painting has a
flippable timedimension shown
vertically above. 1.
The Laissez-Faire
economists are
shown from earliest
(top) to latest
(center) 2. while the
Interventionists are
shown earliest
(bottom) to latest
(center). When the
painting is flipped
vertically, the only
thing that has
changed is who is on
top; time still passes
as we move visually
to the center of the
painting.
Physiocrats
Classical Economics:
Austrian
Economics
NeoClassical
Economics
1.
Laissez-Faire
ideologues:
Chicago School
Microecon
omics
Macroecon
omics
3rd generation:
Great Society:
New Deal:
KEYNES
Industrial
Organization
Institutionalism
2.
Socialism
Malthus
Colbert
Communism
Macroeconomics (left) vs.
Microeconomics (right):
Macroeconomics looks at
Classical Economics:
the overall economy from
the point of view of a
planner. Microeconomics
looks at an individual
household or firm from the
point of the individual who NeoClassical
runs that unit. The Laissezfaire economists are almost Economics
invisible on the
macroeconomic side
because they don’t like
Chicago School
planning for the economy,
and after the crash of 2008,
the credibility of laissez-faire
to achieve stable equilibrium
is gone (as suggested by
the avalanche in the
painting)
Physiocrats
Austrian
Economics
Laissez-Faire
ideologues:
Microecon
omics
Macroecon
omics
3rd generation:
Great Society:
New Deal:
KEYNES
Industrial
Organization
Institutionalism
Malthus
Colbert
Communism
Macroeconomics and microeconomics are flippable.
When the painting is upside down, Upside down the painting
is about actual government intervention. the communists- the
ultimate micro-managers- become the ultimate planners of the
Socialism
macro economy. And the New Deal-Great Society-3rd
generation Keynesians become the micro managers of the
safety net for dependents. Those in the center of the painting
dance either way. Meanwhile the Laissez-faire theoreticians,
having nothing to say theoretically about planning at the
macroeconomic level, have nothing to provide dependents at
the microeconomic level when the economy fails.
2.Beginning with Colbert,
who experiments
with government
taxation and
regulation, a dialog
is set up between
those (Colbert,
Socialism,
Communism,
Institutionalism,
Industrial
Organization,
Heterodox) who
believe in
government
intervention and
those who belief in
laissez-faire
(Physiocrats,
Calssical
Economics,
Neoclassical,
Chicago School,
Austrian, Laissez
Faire) .
Austrian
Economics
NeoClassical
Economics
2.
Chicago School
Macroecon
omics
3rd generation:
Great Society:
New Deal:
KEYNES
Physiocrats
Classical Economics:
Laissez-Faire
ideologues:
Microecon
omics
1.
Industrial
Organization
Communism
Institutionalism
Socialism
Malthus
Colbert
3.The
Physiocrats
are highly
critical of
Colbert’s
interventionist
policies and
create a
political
counter to
those policies
Physiocrats
Classical Economics:
Austrian
Economics
NeoClassical
Economics
2.
Chicago School
Laissez-Faire
ideologues:
3.
Macroecon
omics
3rd generation:
Great Society:
New Deal:
KEYNES
Microecon
omics
1.
Industrial
Organization
Communism
Institutionalism
Socialism
Malthus
Colbert
4.Adam Smith
visits France
and picks up
many ideas
from the
Physiocrats
Physiocrats
Classical Economics:
4.
Austrian
Economics
NeoClassical
Economics
2.
Chicago School
Laissez-Faire
ideologues:
3.
Macroecon
omics
3rd generation:
Great Society:
New Deal:
KEYNES
Microecon
omics
1.
Industrial
Organization
Communism
Institutionalism
Socialism
Malthus
Colbert
5.The NeoClassical
economists
synthesize and
mathematicize the
ideas of the
Classical
Economists to
produce the supply
and demand tools
still used today. But
they add concepts of
equilbrium,
marginalism, and
factor shares which
raise normative
questions.
Physiocrats
Classical Economics:
4.
5.
Austrian
Economics
NeoClassical
Economics
2.
Chicago School
Laissez-Faire
ideologues:
3.
Macroecon
omics
3rd generation:
Great Society:
New Deal:
KEYNES
Microecon
omics
1.
Industrial
Organization
Communism
Institutionalism
Socialism
Malthus
Colbert
6.Meanwhile, the French
Revolution wipes out
the monarchy and
hatches the first
socialist experiments
with community
decision-making.
There is deep
suspicion of markets
because the ill
effects of
competition and
industrialization have
made themselves
felt. Labor feels it is
being cheated of the
surplus from its labor
by the capitalists.
Physiocrats
Classical Economics:
4.
5.
Austrian
Economics
NeoClassical
Economics
2.
Chicago School
Laissez-Faire
ideologues:
3.
Macroecon
omics
3rd generation:
Great Society:
New Deal:
KEYNES
Microecon
omics
1.
Industrial
Organization
Communism
Institutionalism
Socialism
6.
Malthus
Colbert
7.The Communists wish
to take socialism to
the extreme of
allowing no private
property. The state
owns everything and
the capitalists are
weeded out. The
state plans
everything.
Physiocrats
Classical Economics:
4.
5.
Austrian
Economics
NeoClassical
Economics
2.
Chicago School
Laissez-Faire
ideologues:
3.
Macroecon
omics
3rd generation:
Great Society:
New Deal:
KEYNES
Microecon
omics
1.
Industrial
Organization
Communism
Institutionalism
Socialism
6.
Malthus
Colbert
7.
8a-d. Clark and his son
make the transition
from German
socialism to
Neoclassical
economics to
Institutionalism to
Heterodox
Economics. Clark
rejects the
redistribution of
property by the
socialists. While
making important
contributions to the
Neoclassical
schools, he realizes
the problems of
monopoly and writes
a report which
provides the
foundation for setting
up one of the key
U.S. antitrust
agencies, the FTC.
Macroecon
omics
3rd generation:
Great Society:
New Deal:
KEYNES
Physiocrats
Classical Economics:
4.
5.
Austrian
Economics
NeoClassical
Economics
2.
Chicago School
Laissez-Faire
ideologues:
8a.
3.
8b.
Microecon
omics
1.
Industrial
Organization
8c.
Institutionalism
Socialism
6.
Malthus
Colbert
Communism
7.
His son goes beyond the
Institutionalist school
by criticizing the
excesses of the
orthodox
neoclassical
conception of
markets. Others will
travel between
schools, although
not quite as
dramatically as the
Clarks.
Repelled by the
Socilaists (9a) and
the Communists
(9b), the Austrian
School develops
theories of economic
rationality, human
action, and
acquisition of
information to
counter the
economic thinking of
the interventionists.
While they support
the laissez-faire
conclusions of
Neoclassical
economics, they are
also quite critical of
the
mathematicization
and the model of
economic rationality
used by the
Neoclassical
economists (9c).
Macroecon
omics
3rd generation:
Great Society:
New Deal:
KEYNES
Physiocrats
Classical Economics:
4.
5.
Austrian
Economics
9c.
NeoClassical
Economics
2.
Chicago School
Laissez-Faire
ideologues:
3.
8a.
9a.
9b.
8b.
Microecon
omics
1.
Industrial
Organization
8c.
Communism
Institutionalism
Socialism
6.
Malthus
Colbert
7.
10.Laissez-faire
economists often
pay little attention to
the theoretic
economic root of the
arguments for
depending on
markets, and make
the desirability of
markets simply a
given- a religion.
The fervent belief in
markets provides an
ideological
counterweight to the
Soviet Union during
the Cold War, but
leads to massive
defense
expenditures which
leads to even more
massive
government.
Practicing laissezfaire capitalism
becomes an
rd
oxymoron
3 generation:
Macroecon
omics
Great Society:
New Deal:
KEYNES
Physiocrats
Classical Economics:
4.
5.
Austrian
Economics
9c.
NeoClassical
Economics
2.
Chicago School
8a.
Laissez-Faire
ideologues:
10.
3.
9a.
9b.
8b.
Microecon
omics
1.
Industrial
Organization
8c.
Communism
Institutionalism
Socialism
6.
Malthus
Colbert
7.
Physiocrats
Classical Economics:
4.
5.
2.
Chicago School
8a.
Macroecon
omics
3rd generation:
Great Society:
New Deal:
KEYNES
Austrian
Economics
9c.
NeoClassical
Economics
Laissez-Faire
ideologues:
10.
3.
9a.
9b.
8b.
Microecon
omics
1.
Industrial
Organization
8c.
Communism
Institutionalism
Socialism
6.
Malthus
Colbert
7.
Painting Placement
Economics grows out of key face-offs among
economists. Some of these face-offs occur among
economists on the same side- and so they are shown
proximate to each other (with two way arrows). Some
of these face-offs occur between teacher and pupil- and
these are shown proximate to each other with the
teacher vertically further back in time (and the arrow
points to the student). But some are across the
interventionist-laissez faire divide with vertical
placement (and two way arrows). Generally, the faceoff is over specific issues. There are also some
contrasts and parallels where no face-off occurred, but
wouldn’t it be great if they had?!
Molina
Contrasts and
Parallels
Classical Economics:
NeoClassical
Economics
Yunnus
Laffer
Hume
Law
Physiocrats
Adam Smith
Bentham
Say
Mill
Ricardo
Marshall
Walras
Clark
Kaldor
Chicago School
Bohm Bawerk
Austrian
von Mises
Economics
Hayek
Friedman
Shultz
Reagan
Bush
Cheney
generation: Reich
Stiglitz
Rivlin
Tyson
Great Society: Solow
Okun
New Deal:
Berle
KEYNES
Ayn Rand
Buchanan
Tullock
Kornai
Greenspan
Laissez-Faire
ideologues:
Macroecon
omics
3rd
Heterodox
Industrial
Organization
Mueller
Galbraith
Bain
Institutionalism
Commons
Veblen
Ward
Socialism
Malthus
Turgot
Vaubon
Quesnay
Condorcet
Colbert
Microecon
omics
Bowles
Arrow
Habermas
Schumpeter
Kondratiev
Communism
Mao Tse-Tung
Stalin
Lenin
Marx
Fourier
Owen
Proudhon
St. Simon
Rousseau
Major Face-offs
The face-offs occur over specific issues. The issues
examined here are:
•Will Capitalism work?
•Does the market automatically eliminate shortages and
surpluses (gluts)?
•Is government intervention needed?
•Is there a “public good”?
•How does money affect income?
Even though Economists want to be scientists many of
them are still playing childhood games of good-guys
and bad-guys; before science is ever applied, their
results are predictable. Some of the bad guys make fun
reading.
Will capitalism work?
Classical Economists: Capitalism produces the technological change that saves the economy
from the dismal predictions of Malthus.
Socialists: Abolish the excesses of Capitalism. Come up with creative experiments to use
markets to socialist ends. Eliminate the capitalists’ ill-gotten gains; that’s the reason for the
government or a community to takeover the decisions and returns from owning capital.
Marx: There are clear historical stages of progress from a mediaeval to a capitalist to a
communist economic system. His progression has an Hegelian inevitability to it.
Applied Communism (Mao, Stalin, Lenin): We can jump from the agricultural stage to
Communism, by suppressing Capitalism and never let it raise its ugly head (but degrees of
private ownership creep into their experiments: Russia experiences one of the great
privatizations of all time).
Kondratiev: Capitalism faces a 150 year cycle, marked initially by fast growth, but inevitably a
slow down and collapse.
Keynes: Capitalism can work if government can bail it out when necessary.
Schumpeter: Capitalism is saved by its ability continually to creatively destroy itself. It is always
tearing down its own institutions through its inventions, innovations, and diffusion of
technological change. On the other hand the technocrats may gain enough control to stifle
this creative force, erect a welfare state which leads to the atrophy and destruction of an
economy.
Ayn Rand: Capitalism is the only thing that works, but it doesn’t work if government interferes.
Industrial Organization: Capitalism can work with regulation, taxation/subsidy, antitrust, and
formal industrial policy.
Kornai: Totalitarian government doesn’t work. Capitalism is the default.
Habermas: Late Capitalism destroys the Enlightenment’s dream of a rational human being
through institutions which illuminate discourse.
Molina
Hume
Classical Economics:
Shortages
& Surpluses?
Malthus sets
the stage NeoClassical
Economics
Yunnus
Laffer
Law
Physiocrats
Adam Smith
Bentham
Say
Mill
Ricardo
Marshall
Walras
Clark
Kaldor
Chicago School
Bohm Bawerk
Austrian
von Mises
Economics
Hayek
Friedman
Shultz
Reagan
Bush
Cheney
Laissez-Faire
ideologues:
Ayn Rand
Buchanan
Tullock
Kornai
Greenspan
Microecon
omics
Macroecon
omics
3rd generation: Reich
Stiglitz
Rivlin
Tyson
Great Society: Solow
Okun
New Deal:
Berle
KEYNES
Turgot
Vaubon
Quesnay
Condorcet
Heterodox
Industrial
Organization
Mueller
Galbraith
Bain
Institutionalism
Commons
Veblen
Ward
Socialism
Malthus
Colbert
Bowles
Arrow
Habermas
Schumpeter
Kondratiev
Communism Mao Tse-Tung
Stalin
Lenin
Marx
Fourier
Owen
Proudhon
St. Simon
Rousseau
Molina
Shortages
& Surpluses?
Say’s Law
Classical Economics:
NeoClassical
Economics
Yunnus
Laffer
Hume
Law
Physiocrats
Adam Smith
Bentham
Say
Mill
Ricardo
Marshall
Walras
Clark
Kaldor
Chicago School
Bohm Bawerk
Austrian
von Mises
Economics
Hayek
Friedman
Shultz
Reagan
Bush
Cheney
Laissez-Faire
ideologues:
Ayn Rand
Buchanan
Tullock
Kornai
Greenspan
Microecon
omics
Macroecon
omics
3rd generation: Reich
Stiglitz
Rivlin
Tyson
Great Society: Solow
Okun
New Deal:
Berle
KEYNES
Turgot
Vaubon
Quesnay
Condorcet
Heterodox
Industrial
Organization
Mueller
Galbraith
Bain
Institutionalism
Commons
Veblen
Ward
Socialism
Malthus
Colbert
Bowles
Arrow
Habermas
Schumpeter
Kondratiev
Communism Mao Tse-Tung
Stalin
Lenin
Marx
Fourier
Owen
Proudhon
St. Simon
Rousseau
Molina
Shortages
& Surpluses?
Classical Economics:
NeoClassical
Economics
Yunnus
Laffer
Hume
Law
Physiocrats
Adam Smith
Bentham
Say
Mill
Ricardo
Marshall
Walras
Clark
Kaldor
Chicago School
Bohm Bawerk
Austrian
von Mises
Economics
Hayek
Friedman
Shultz
Reagan
Bush
Cheney
generation: Reich
Stiglitz
Rivlin
Tyson
Great Society: Solow
Okun
New Deal:
Berle
KEYNES
Ayn Rand
Buchanan
Tullock
Kornai
Greenspan
Laissez-Faire
ideologues:
Macroecon
omics
3rd
Heterodox
Industrial
Organization
Mueller
Galbraith
Bain
Institutionalism
Commons
Veblen
Ward
Socialism
Malthus
Turgot
Vaubon
Quesnay
Condorcet
Colbert
Microecon
omics
Bowles
Arrow
Habermas
Schumpeter
Kondratiev
Communism
Mao Tse-Tung
Stalin
Lenin
Marx
Fourier
Owen
Proudhon
St. Simon
Rousseau
IS GOVERNMENT INTERVENTION NEEDED?
1.Colbert (the government intervention solution): Forced to finance the Napoleonic Wars, Colbert creatively finds ways to
stimulate French manufacturing industries through subsidies and to impose protectionism against foreign imports. He also
finds ways to tax more efficiently.
2.Law (the private sector solution): Saddled with enormous debt Louis XIV employs a Scot to set up foreign projects, allow
private stock to be sold in those projects on the basis of their expected future income, allow the exchange of that stock for
government debt, and … voila… debt paid! But the economy comes crashing down when people no longer expect the
foreign projects to generate income. Problem!
3.And a problem that resurfaces about every ten years thereafter right up to 2008, forcing the government to intervene even
more or to face revolution (Louis XVI). Like Law, Alan Greenspan wants to take the laissez-faire approach, but finds the
market to crash beneath him.
4a.Like Louis XIV, President Bush finds that he needs to intervene with more government when the market crashes so that he
becomes the ironic victim of the laissez-faire approach.
4b.Like Louis XVI, President Bush is beheaded with his whole party.
5.The Physiocrats. In reaction against Colbert, the Physiocrats argue that the government intervention actually makes the
economy more inefficient. They fight the protectionist, regulatory, and taxation schemes with the cry “laissez faire.”
6a.Suppose communities (women, indians, martians) are not powerful enough to protect themselves, does human nature
protect such communities? Plato raises the question in the Myth of Gyges- Gyges who does evil once he has a cloak of
invisibility. Is there anything in the market that protects such communities?
6b.AdamSmith: The invisible hand works through competition to achieve desirable outcomes for markets He popularizes the
Physiocrat’s point of view. Nevertheless he justifies government regulation of monopoly.
7.Ricardo. Free trade allows everyone to gain by specializing in what they have a comparative advantage in producing and
therefore the trade protectionism should be eliminated. Government taxation and intervention should be kept to a
minimum.
8.Socialism. Government planning and ownership can provide a means for achieving the best market outcomes while still
achieving valuable public outcomes that a flawed market can never achieve.
9.Communism.Markets always fail and sacrifice the worker. The government should own the means of production. People
should be able to work according to their ability and consume according to their needs.
10. Hayek. The market efficiently allows the exchange of information necessary to determine the prices necessary for the
market to achieve efficient outcomes. Inserting a 3rd party between every communication only serves to make
communication impossible. The volume of information needed is beyond the possibility of any central authority ever to
process the information needed for the efficient exchange of goods and services.
11.Kornai. Totalitarian government results in a chronic shortage economy.
IS GOVERNMENT INTERVENTION NEEDED? (CONTINUED)
12.Ayn Rand and the Laissez-Faire clan. Government cannot be trusted and should not be used. Only individual enterprise
can be relied upon to be productive. Government intervention limits the creativity and abilities of free enterprise. Survival
of the fittest means the weak should be allowed to fail. If the weak are preserved our strong are weakened.
13.The wrecking crew: Dismantle government agencies. If that can’t be done, subcontract the work to the private sector. If that
can’t be done, underfund them through prioritization at the Office of Management and Budget. If that can’t be done, don’t
allow them to employ anyone. If that can’t be done, detail deadwood from other agencies. If that can’t be done, don’t
appoint an agency head. If that can’t be done, appoint a dependable anti-government head of the agency. In any event
don’t let an agency write its own history, control its public relations, or keep documentation sitting around. And if you can’t
cut it back, feed the beast until it blows itself up. It’s guerilla warfare to keep down big government, even if you have to
increase big government to do it.
14.Keynes,. When there isn’t enough demand and prices don’t eliminate the surplus, government may have to intervene with
greater demand to stabilize the economy.
15a. Laffer. Government stifles growth. Rather than stabilizing the economy through demand side policies, supply side
policies should enhance the availability of resources.
15b. The wrecking Crew 2: Yes, whenever we get into office, let’s loot the government of any stockpiled commodities it owns,
dump them on the economy, and curb inflation (and by the way, use the proceeds to balance the budget!).
16. The rest of the conservative macroeconomists- gone due to the 2008 avalanche pictured.
17. The New Deal, the Great Society, and the 3rd generation. Keynes reaffirmed. Infrastructure investment becomes the
optimal public investment. The government must take over when the private sector fails.
16. Institutionalism. When the market fails to take care of the weak, government must provide a safety net. Government also
takes the responsibility for regulating the private sector.
17. Industrial Organization. Isn’t it time that someone measured whether or not markets work, whether there is something
called market power, and what the impact of government policy is? By the way, watch out that government isn’t taken over
by the private sector! The government should plan with a systematic industrial policy, rather than defaulting to capture of
government by powerful private interests.
18.Friedman. Government should not be in the business of choosing winners or losers. It should be limited in its powers so
that it cannot be taken over by private interests. Exit (in other words, bankruptcy and liquidation) is the way markets
preserve the most efficient firms. Without exit there are barriers to entry to efficient firms gaining enough of the market to
survive. We should have let Chrysler fail in 1978, rather than bailing it out, because in 2008, we have to bail it out again!
Molina
Hume
Classical Economics:
NeoClassical
Economics
Yunnus
Laffer
Law
Physiocrats
Adam Smith
Bentham
Say
Mill
Ricardo
Marshall
Walras
Clark
Kaldor
Chicago School
Turgot
Vaubon
Quesnay
Condorcet
Bohm Bawerk
Austrian
von Mises
Economics
Hayek
Laissez-Faire:
Friedman
Shultz
Reagan
Bush
Cheney
Ayn Rand
Buchanan
Tullock
Kornai
Greenspan
Microecon
omics
Macroecon
omics
3rd generation: Reich
Stiglitz
Rivlin
Tyson
Great Society: Solow
Okun
New Deal:
Berle
KEYNES
Industrial
Organization
Mueller
Galbraith
Bain
Institutionalism
Commons
Veblen
Ward
Socialism
Malthus
Colbert
Heterodox Bowles
Arrow
Habermas
Communism
Mao Tse-Tung
Stalin
Lenin
Marx
Fourier
Owen
Proudhon
St. Simon
Rousseau
IS THERE A PUBLIC GOOD?
1.Molina: Get God out of it. While God may know everything, man has free will. God’s knowledge is a secondary
knowledge that has nothing to do with Human Beings taking responsibility for their actions. Let the enlightenment guide
policy toward humans!
2.Hume: Consequences matter, not intent (virtuous or otherwise)
3.Adam Smith: The invisible hand works regardless of the intent of the participants. People are motivated by their
sympathy for others
4.Bentham:The greatest happiness for all is the goal of society
5.Mill: maximization of individual utility is the goal of individuals. The maximization of utility for individuals will achieve the
the public good.
6.Kaldor: Amend the “Pareto” criterion which was that a choice for society is economically efficient if no other choice can
make someone better off without making someone else worse off. Choices can still be efficient if those who are made
worse off will accept compensation in being made worse off.
7.Ayn Rand: Don’t trust social objectives, and particularly don’t trust governments that pretend to be achieving the public
good.
8.Arrow: With the Impossibility Theorem, unless we accept dictatorship, it is not possible to define what the “public good”
is. It is not possible to add or compare the utility of one person with that of another. Arrow’s work on the conditions under
which markets generate efficient outcomes provides the basis for other economists to define the “market failures” which
prevent the market from generating efficient outcomes. “Public good” takes on a completely different meaning to indicate
those goods from which people cannot be excluded from the benefits. This turns Kaldor on his head; the problem is not
the compensation of the losers, but forcing the winners to pay up.
9.Stiglitz: Just look at 2008! It’s all about market failures; read my book “FreeFall”
10. Buchanan (B) and Tullock (T). If we can’t determine what the public good is, what the h… is government doing? And
let’s take a look at how government decides to do it. B&T create the “Public Choice” discipline to study how government
decides. Specifically, the new field finds there is no voting system that is economically efficient in representing what
people really want, decisive (being able to choose among alternatives), and equitable. Now what…
11.The totalitarians (Mao, Stalin, Lenin) historically have something to say about how to make people decide to achieve
the public good, as defined by them.
12.Socialists. There are ways, short of Communism, to organize communities to take advantage of markets and to decide
what is in the communities’ interest.
Molina
Hume
Classical Economics:
NeoClassical
Economics
Yunnus
Laffer
Law
Physiocrats
Adam Smith
Bentham
Say
Mill
Ricardo
Marshall
Walras
Clark
Kaldor
Chicago School
Turgot
Vaubon
Quesnay
Condorcet
Bohm Bawerk
Austrian
von Mises
Economics
Hayek
Laissez-Faire:
Friedman
Shultz
Reagan
Bush
Cheney
Ayn Rand
Buchanan
Tullock
Kornai
Greenspan
Microecon
omics
Macroecon
omics
3rd generation: Reich
Stiglitz
Rivlin
Tyson
Great Society: Solow
Okun
New Deal:
Berle
KEYNES
Industrial
Organization
Mueller
Galbraith
Bain
Institutionalism
Commons
Veblen
Ward
Socialism
Malthus
Colbert
Heterodox Bowles
Arrow
Habermas
Communism
Mao Tse-Tung
Stalin
Lenin
Marx
Fourier
Owen
Proudhon
St. Simon
Rousseau
HOW DOES MONEY AFFECT INCOME?
Law is highly innovative in creating a central bank that issues money which is redeemable for interest
bearing debt and/or high return stock in speculative colonial enterprises.
Keynes believes money has a crucial impact on the economy through interest rates. Higher interest rates
choke off investment, lower aggregate expenditure, and, through a multiplying effect, lower income of
the economy.
Hayek opposes Keynes and views manipulation of interest rates to stimulate the economy as a source of
false signals about what sectors to subsidize. The overstimulated sectors produce surpluses of capital
that will only be wasted; the overhang of housing after 2008 is a pretty good illustration of his point.
Friedman sees the policy on money as the root of the depression. To avoid shocks and counterproductive
anticipations of central bank actions to change the money supply, he advocates raising the money
supply at a steady rate through time.
Mundell recognizes the interest rate changes of the central bank in controlling the money supply may be
counterproductive. While an autonomous economy might respond to higher interest rates with a lower
money supply, foreign investment may actually cause a surge in money in response to higher interest
rates.
Solow says in response: "Everything reminds Milton Friedman of the money supply. Everything reminds
me of sex, but I try to keep it out of my papers.”
(http://en.wikipedia.org/wiki/Robert_Solow July 17, 2011)
Shultz wants to get the U.S. off of the gold standard and is a key decision maker in the decision to end the
Bretton Woods system on August 15, 1971. (Arthur Burns, Diary, 2010 University of Kansas Press).
Greenspan masters the art of minimal information to prevent shocks from sudden changes in Fed policy
on the money supply. He adheres to a laissez-faire approach in regulating the housing sector, the
derivatives market, and the banking industry which sets him up for some of the blame for the crash of
2008.
Molina
Hume
Classical Economics:
NeoClassical
Economics
Yunnus
Laffer
Law
Physiocrats
Adam Smith
Bentham
Say
Mill
Ricardo
Marshall
Walras
Clark
Kaldor
Chicago School
Bohm Bawerk
Austrian
von Mises
Economics
Hayek
Friedman
Shultz
Reagan
Bush
Cheney
Laissez-Faire
ideologues:
Ayn Rand
Buchanan
Tullock
Kornai
Greenspan
Microecon
omics
Macroecon
omics
3rd generation: Reich
Stiglitz
Rivlin
Tyson
Great Society: Solow
Okun
New Deal:
Berle
KEYNES
Turgot
Vaubon
Quesnay
Condorcet
Heterodox
Industrial
Organization
Mueller
Galbraith
Bain
Institutionalism
Commons
Veblen
Ward
Socialism
Malthus
Colbert
Bowles
Arrow
Habermas
Schumpeter
Kondratiev
Communism Mao Tse-Tung
Stalin
Lenin
Marx
Fourier
Owen
Proudhon
St. Simon
Rousseau
WHO ARE THE BAD GUYS?
Quesnay: Manufacturers are the bad guys. Quesnay views the French Aristocrats and the
manufacturers that serve them as parasites on the agricultural sector. He develops his Tableau
économique of the relationships among the sectors with this in mind.
Proudhon: “What capital does to labour, and the State to liberty, the Church does to the spirit.”
(http://en.wikipedia.org/wiki/Pierre-Joseph_Proudhon
August 16, 2011) Trust no institution, particularly anyone who tries to govern. Proudhon is one of
the first anarchists. Ironically similar to Ayn Rand with respect to government.
Marx: The capitalists are the bad guys. All value can be traced to the labor in it. The surplus
received by the capitalists has been stolen from the share owed to the workers.
Socialism: The capitalists are the bad guys who have foisted industrialization on the workers and
who are responsible for the inhuman conditions in which the workers find themselves.
Industrial Organization: Those who have market power are the bad guys. They are the ones who
curb production, charge exorbitant prices, inefficiently produce, excessively advertise, and fail to
provide quality to the customer. At their doorstep can be laid the economy of waste, pollution,
and dysfunctional public policy. The Santa Clara Supreme Court decision and Citizens United
should be reversed!
Hayek: The socialists and the communists are the bad guys because they make the economy
inefficient by inhibiting discovery and exchange of information.
Schumpeter: The self-interested technocrats cause stagnation by preventing creative destruction.
They’re the bad guys.
Ayn Rand and Laissez-Faire Economists: Government is the bad guy because it takes away the
liberty people need to be the best that they can be.
Kornai: Totalitarian government is bad because it leads to a shortage economy.
Habermas: The corporate-capital-driven mass media is the evil that creates the bourgeois,
consumption-driven public that kills communicative competence and rationality.
Molina
Hume
Classical Economics:
NeoClassical
Economics
Yunnus
Laffer
Law
Physiocrats
Adam Smith
Bentham
Say
Mill
Ricardo
Marshall
Walras
Clark
Kaldor
Chicago School
Bohm Bawerk
Austrian
von Mises
Economics
Hayek
Friedman
Shultz
Reagan
Bush
Cheney
Laissez-Faire
ideologues:
Ayn Rand
Buchanan
Tullock
Kornai
Greenspan
Microecon
omics
Macroecon
omics
3rd generation: Reich
Stiglitz
Rivlin
Tyson
Great Society: Solow
Okun
New Deal:
Berle
KEYNES
Turgot
Vaubon
Quesnay
Condorcet
Heterodox
Industrial
Organization
Mueller
Galbraith
Bain
Institutionalism
Commons
Veblen
Ward
Socialism
Malthus
Colbert
Bowles
Arrow
Habermas
Schumpeter
Kondratiev
Communism Mao Tse-Tung
Stalin
Lenin
Marx
Fourier
Owen
Proudhon
St. Simon
Rousseau