Tag Archives: J M Keynes
This week on Facebook: Sees me return to economics, yet more history and the despair of an old man who — like all old men before me — thinks that the world is going to hell in a handcart. My first instinct was to ignore articles on helicopter money as it being something that I was incapable of having an influence on (which is true) and finding myself totally confused by the rationales offered by economists and politicians. Nevertheless, the notion of helicopter money made me think of some historic precedents that I believe are valid allusions to its use. Read more of this post
The role that economic theory plays in the ‘creation of money’ and the role played by all politicians in the manipulation of ‘economic theory’ for the purpose of a fiscal policy, bear little relationship to the social responsibility that Drucker applied to a private enterprise.
“The first responsibility of business is to make enough profit to cover the costs for the future. If this social responsibility is not met, no other social responsibility can be met.”
A previous post Seeking Keynes – the cake introduced John Maynard Keynes and his book THE ECONOMIC CONSEQUENCES OF THE PEACE. Keynes wrote the book in 1919 following his resignation from the British delegation to the Paris Peace Conference, when it became evident that there was no hope of substantial modification in the draft Terms of Peace. The following is a condensed version of selected parts in which Keynes considered the nature of Europe and the Treaty of Versailles.
The Cobden Centre aims to promote social progress through honest money, free trade and peace. Something very commendable, but obviously doesn’t preclude disingenuous commentary now that advocates of hard money would seem to be in the ascendancy over the advocates of soft money. At least that’s the view I took on reading the ‘Top ten reasons why fiat currency is superior to gold (pdf – full transcript)’. Read more of this post
Mankiw’s Ten Principles of Economics, Translated
by Yoram Bauman 
University of Washington, Seattle, Washington
The cornerstone of Harvard professor N. Gregory Mankiw’s introductory economics textbook,Principles of Economics, is a synthesis of economic thought into Ten Principles of Economics (listed in the first table below). A quick perusal of these will likely affirm the reader’s suspicions that synthesizing economic thought into Ten Principles is no easy task, and may even lead the reader to suspect that the subtlety and concision required are not to be found in the pen of N. Gregory Mankiw. Read more of this post
‘I shall never cease to admire her courage and determination. – But at the end of it, she was a great and noble failure, who forgot or ignored half of what she really needed to do, and so lived to see almost all her successes negated. And until conservatives in Britain and America are ready to recognize that, they too will fail, over and over again’.
Abridged here from a commentary with the title Anatomy of Thatcherism that first appeared in 2009 at the Project Syndicate and written by Robert Skidelsky, he would seem to support Hitchens’ view of Margaret Thatcher. Clearly a Keynesian, Skidelsky sees Thatcherism as the outcome of Thatcher/Reagan economics.
‘The Thatcher revolution inspired policies to free markets from government interference. Many people attribute the global crisis to these very ideas, the Anglo-American model of capitalism is deemed to have failed. The following hindsights are judgement on which elements of the Thatcher revolution should be preserved, and which should be amended as a result of global economic downturn’. Read more of this post
I would hesitate to describe myself as pragmatic during my time spent in the Civil Service. In its archaic use (pragmatic – active in an officious or meddlesome way) it fits too well with my perception of the Civil Service. I would often describe myself to my colleagues as a ‘Socialist Thatcherite‘. My early childhood during WWII made me ‘a socialist sympathiser’ and in this I would claim a philosophy of pragmatism. While ‘Socialist Thatcherite’ fits well into the category of an oxymoron, my colleagues, who for the most part were Tory supporters (in varying degrees) could well be described as ‘Thatcherite Socialists’. They were quite happy for the reforms advocated by Thatcher to be implemented elsewhere, but not in the Civil Service sector served by them. Public money was perceived as being a horn of plenty but they soon found out that Thatcher was no Abundantia. She in turn was to find out that the Civil Service was conservative only with a small ‘c’. Read more of this post
John Maynard Keynes was temporarily attached to the British Treasury during the First World War and was their official representative at the Paris Peace Conference up to June 7, 1919; he also sat as deputy for the Chancellor of the Exchequer on the Supreme Economic Council. He resigned from these positions when it became evident that there was no hope of substantial modification in the draft Terms of Peace. The grounds of his objection to the Treaty, or rather to the whole policy of the Conference towards the economic problems of Europe, are contained in his book THE ECONOMIC CONSEQUENCES OF THE PEACE. Written in 1919, when Keynes was 36 years old, this book brought him fame. It is, in part, condensed in the following, which covers Keynes’ deliberations on the accumulation and division of wealth leading up the First World War and the impact that war may have on it. Read more of this post
Advances of computer technology enable a modern society to model just about anything, something that politicians set great store by. Particularly for its use in macroeconomics modelling, where such modelling can serve as either a Judas goat or a scapegoat. However, the adage of GIGO (garbage-in/garbage-out) still applies , and my experience leads me to the belief that the use of any model validation is functionally dependant more on the desired outputs than on the use of any valid data input. This, in turn, is totally dependant on the modelling process itself. Achieving the desired output is simply a matter of manipulating the input data and, if necessary, the modelling process. For a politician this is already too much detail. What the politician wants is a favourable political result, which is ‘the desired output’ and the ability to offset the blame should things go wrong.
Quantitative Easing is the method used by the UK government (past and present) to stimulate economic growth by injecting money electronically into the economy. The theory is that the sale of British Government bonds (gilts) and high quality Corporate Bonds from private sector companies (banks, pension funds, insurance companies and non-financial institutions) provides this economic stimulus. Quantitative easing to finance the purchase of these bond sales injects money directly into companies (and into the government coffers) thus increasing their available capital. The theory being that this in turn allows the release of money into the general economy, which also stimulates growth. In selling gilts the government effectively promotes a legal Ponzi scheme. In buying gilts or Corporate Bonds with money electronically printed for that purpose, the government and the banks are effectively laundering that money. When the State spends more money than it receives in taxes and resorts to printing more money; to paraphrase Frank Chodorov from Don’t buy Government Bonds, it is deliberately committing an act of bankruptcy.