[lbo-talk] Austerity Economics: Tied Up in Knots?

[michael perelman]

A core element of neoclassical economics was to emphasize transactions
rather than work, workers, or working conditions.  The idea was that
the justification of the system was the utility enjoyed by consumers.
All considerations of work, workers or working conditions were to be
swept aside.  Production is relevant only insofar as serves to satisfy
consumer needs.

Macroeconomics was expected to depend upon this neoclassical micro
foundation.  Nonetheless, macroeconomics centered on demand is
rejected by all good austerians.  Instead, the current fad is to
emphasize supply-side economics.  Trading the social safety net
encourages hard work.  Tax cuts ensure more employment.

Over and above the self-destructive consequences of austerity, the
recent wave of austerian nonsense has the unintended consequence of
contradicting the intellectual foundation of neoliberal economics.

-- 
Michael Perelman
Economics Department
California State University
Chico, CA
95929

530 898 5321
fax 530 898 5901
http://michaelperelman.wordpress.com