Mandel and Keynes

Louis Proyect lnp3 at panix.com
Thu Sep 17 09:45:00 PDT 1998


At 12:31 PM 9/17/98 -0400, you wrote:
>Re Doug's "If the world is slipping into a true
>global slump, there's no help coming from either fiscal or monetary
>stimulus - quite the contrary, if anything, policy is tightening."
>
>OK, I'll play the stooge here: Why is the Establishment being so STUPID
>and acting contrary to its own interests?
>
>Carl Remick

Because either choice represents major risks. Staying the course risks the possibility that deflation will spread and drag down the global economy. If there is lowered interest rates, there is a risk that inflation will take off, as the NY Times reported today: "But Germany's powerful central bank, the Bundesbank, signaled Tuesday that it continued to see inflation as a threat in Europe, and officials from other nations have also been playing down the possibility of quick action on rates or any other response to the world's economic problems."

This is the outcome of integrating all of the world's economies into the capitalist system, or what some call "globalization". Keynsian tactics that might have been functional within a given border 25 years ago might now negative consequences in some other powerful capitalist rival overseas.

This is what is known in Marxist terms as a "contradiction".

This is not limited to economics by the way. I take prozac to mellow me out but it upsets my stomach and reduces my sex drive. I can cut out the prozac but then I can't get a decent night's sleep. Damned if you do, damned if you don't. (Probably the only solution to both my disthymia and the global economic crisis is to overthrow the capitalist system.)

Louis Proyect

(http://www.panix.com/~lnp3/marxism.html)



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