kids v. economists

Rob Schaap rws at comedu.canberra.edu.au
Sat Feb 24 07:03:44 PST 2001


G'day all,

Nice to see a little economics back on list.

Australia has pushed competition policy pretty hard for a dozen years now, and it's beginning to reap its rewards. Only the big banks (acting, it seems to most small customers, as an oligopoly) and the big retailers (of which we have very few) have been making any money for a while, the white-collar stratum is being disembowelled in waves of 'restructuring', farmers have lurched to the far right, the small-business community is becoming a political wrecker of all parties neoliberal, the stock market is flat, consumers are going massively into debt to get it while it's hot and Oz's terms of trade are sagging.

Seems to me you can just about choose your economist to explain this. Marx: as organic composition of capital increases, increased productivity is manifesting as declining values. Schumpeter: monopolies ride waves better, their reliable pricing policies can keep the bacilli of recession at bay, shareholders are more likely to keep the faith, larger budgets for commodity innovation. Kalecki: Under a laissez-faire system the level of employment depends to a great extent on the so-called state of confidence. If this deteriorates, private investment declines, which results in a fall of output and employment. Keynes: In the event of fiscal policy not preventing 'stagflation' a central bank might adjust interest rates such as to balance savings and investments through a period of technological change. Oh, and Schaap: Give blind accumulation its head and it'll blindly run into a wall of its own blind manufacture.

In fact, now that I see the above, it strikes me as a fairly mutually compatible integration of ideas ...

Anyway, the only economists who can't come up with the necessaries are the ones we listen to these days - oh, and about 90% of the world's treasurers and finance ministers.

And American national accounts go a billion big ones further into the red every day, its citizens are highly leveraged on the strength of long-gone market values, and Indonesia and Turkey are threatening to hit banks (I hear Dresdner and Deutsche are watching Turkey with, um, interest) and general sentiment pretty hard (oh, and some people'll probably die there - but then you can't make a pile of broken eggs without breaking some eggs, eh?).

Do I need putting right on any of this?

Shitting in the woods, Rob.



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