The Early Days of a Better Nation

Monday, February 15, 2010

The liquidity trap, shown by boom and bust rap!

A much clearer and fairer account of Keynes and Hayek (and thus, roughly, left and right responses to the current crisis) than you're likely to find anywhere else, as well as more fun:


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Hayek on the left, Keynes on the right? (let freedom reign or use the state to intervene on behalf of the power elite)

Ah, but it's professionally produced by the wingnuts (Mercatus Institute, probably Koch Foundation funding), which I suppose is why Hayek seems to get the last word.

Thanks for sharing this interesting video.

I'm going to send this funny video to some economists and philosophers of economics whom I know. I laughed without understanding much of it.

Nice video.

I wonder how a rapper Marx would fit into this debate.

`I wonder how a rapper Marx would fit into this debate.'

Good question. Hayek and Keynes represent the two sides of a dichotomised and therefore idealised debate as it plays out in bourgeois society and bourgeois minds. Of course, Marx would be putting the socialist case as the only reasonable solution to our current travails.

Though far apart ideologically, Marx and Hayek have some important overlap. There's a reason John Strachey described Prices and Production as "a theory of capitalist crisis and of the trade cycle that made sense."

I think he also has important overlap with Keynes though also far apart ideologically. I think the point is that Hayek and Keynes drift away from a reasonable explanation of the empirically verifiable fact into the extremism of abstraction and become hyper ideological in the process. But of course the ruling ideas are the ideas of the ruling class.

This here is a quote from Lenin's `The Three Component Parts of Marxism':

`But this is not all. The history of philosophy and the history of social science show with perfect clarity that there is nothing resembling “sectarianism” in Marxism, in the sense of its being a hidebound, petrified doctrine, a doctrine which arose away from the high road of the development of world civilisation. On the contrary, the genius of Marx consists precisely in his having furnished answers to questions already raised by the foremost minds of mankind. His doctrine emerged as the direct and immediate continuation of the teachings of the greatest representatives of philosophy, political economy and socialism.

`The Marxist doctrine is omnipotent because it is true. It is comprehensive and harmonious, and provides men with an integral world outlook irreconcilable with any form of superstition, reaction, or defence of bourgeois oppression. It is the legitimate successor to the best that man produced in the nineteenth century, as represented by German philosophy, English political economy and French socialism.'

In fact, Marx had already completed a reasoned critique of bourgeois political economy and the theories of Hayek and Keynes are themselves later sectarian reactions to Marxism.

Marx gave a very similar theory
to Hayek's and von Mises's view
of the credit cycle in the
third volume of Capital.As Hayek
pointed out,Keynes liked the 17th
century mercantalists and the
inflationist John Law.

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