PIMCO quotes Minsky

Ted Winslow egwinslow at rogers.com
Thu Jul 11 11:49:52 PDT 2002


Doug asked:


>> This idea of "uncertainty" looks weird to the kind of personality
>> psychologically unable to face such uncertainty.
>
> Do you include in this category socialists who object to the "anarchy
> of capiatlist production," and view planning as more rational than
> the chaos of the market?

It depends on the idea of "planning" involved.

Where this is taken to include the possibility of knowing (at least in a probabilistic sense) the complete long run consequences of present decisions then the answer will likely be yes. That this is so will show up in other aspects of the concept of planning involved.

Mirowski is unintentionally quite good on this. He documents the "socialist planning" orientation of key individuals in the development of contemporary economic orthodoxy. This development was financed in no small part by the military and had as its focus C[to the power]3I (Mirowski's shorthand for command, control, communication and information) with the emphasis on the first two "Cs".

It's also not unconnected, I suspect, to the kind of apocalyptic Marxism that obsesses over the algebra of long run crisis theory, particularly the kind with a predilection for socialist planning as C3I.

Keynes's "uncertainty" only characterizes part of the future. It's perfectly consistent with a great deal of rational forecasting and planning.

Keynes's psychological premises explain his response to Hayek (according to Keynes, a personality of the kind at issue) on planning. The form taken by planning depends, Keynes implicitly claims, on the extent to which it takes place in a "community which thinks and feels rightly" as opposed to one which thinks and feels "wrongly" (Keynes, Collected Writings, vol. XXVII, p. 388). To the extent that it does, it will not take a form dominated by defenses against persecutory anxiety i.e. it will be "rational" (though in a sense very different from the meaning given this word in contemporary economics).

Ted



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