Wednesday, 25 March 2015

Why I'm not a Marxist or a 'cold-hearted' Keynesian

As a sort of part II to my earlier post, which you can find here, I will now address one of the marxists with whom I engaged in a few discussions over twitter - he is guilty of great ignorance in regard to the monetary system (double-entry bookkeeping) and operational reality.
But with the claims he makes in this article, it seems to me that he is either really uninformed or deliberately engaging in strawman tactics.
I replied to him, saying: The economic downturn of the 70’s is NOT the fault of Keynesian policies. Quite strange to hear a Marxist arguing that governments caused stagflation whilst pursuing full employment aims. I then gave him a relevant paragraph from Bill Mitchell's article here.
Surprisingly then, he replied I think you misunderstood me: I said Keynesian policies caused the stagflation of the 1970s, not the depression of the 1970s. Although you don’t make a distinction, I do. In any case, monetarism is only a variant of Keynesianism.

My reaction to that was this: That is also untrue. Supply side inflation is NOT the fault of keynesian policies. Again, a neoliberal would make such a false claim, not a socialist/marxist. Alternatively, a nr of government buffer stock policies were being scrapped around the same time. Monetarism is NOT a variant of what Keynes suggested for governments to do. Monetarism is an invention of the corrupt establishment that used exogenous factors (of geopolitical nature) to sabotage the New Deal legacy of post-WW2 – it’s a travesty, just like modern-day republicanism is a travesty of its original ideology, just like modern-day labor is a travesty of what it once was.
I’m all in favor of exposing strawman arguments when I see them made, regardless of the side who makes them.

Labor theory of value aside, what many marxists don't understand is how the monetary system works. More than that, the person in question with whom I debated, even went so far as to claim that barter is a myth (that it never existed). In turn, I pointed out that the mainstream view that money evolved out of barter is false, not barter itself. Indeed, barter is secondary to money - private individuals issued their own IOUs, governments issued public IOUs. Furthermore, the person in question went to argue that the sectoral balance (S-I)+(G-T)+(X-M)=0 contains 2 unnecessary sectors (foreign and domestic private). I then replied saying that, governments are not households, and households are not governments. And that, unless you have world government, and your country engages in trade with the rest of the world, there's going to be a foreign sector.
Then he went on to say that the sectoral balance is just an illusory artifact created by the capitalists. I then replied, no matter the political-economic system you'll have in place, you're going to need a method of accounting in order to keep records of transactions (a score keeping system).
Then the person in question went on to claim that all forms of government intervention in the economy - which regulates market and creates employment etc - can be considered fascist, including state capitalism, socialism, social-democracy (in the contemporary sense of the word), nazism et all. I then asked him, why are you labeling fiscal policy means to a particular political ideology? I received no reply to that question.
1 point of disagreement I have with marxists is that they constantly yell out "crisis of capitalism" every time there's a recession going on. For the love of the gods, negative economic growth caused by private debt deflation and pro-cyclical government fiscal policy is NOT the breakdown of capitalism. The solutions, empirically proven time and time again throughout history (from ancient to contemporary times) is that if you spend enough to offset shortfall in private sector spending, then the economy will pick up - spending translates into earnings, that translates in sales, sales translate into production and employment - then the automatic fiscal stabilizers (working always counter-cyclically) will inevitably bring down the fiscal deficit. More than that, they seem to be unaware of the difference between microeconomic problems and macroeconomic problems - and that macroeconomic solutions are only able to solve macroeconomic problems. No, this isn't a "capitalist invention", marxists, it's a scientific argument. Just like you cannot extrapolate behaviors of physical factors from a closed system to an open system or vice-versa, you cannot solve macroeconomic problems with microeconomic solutions or vice-versa. Neoliberals/Monetarists don't understand this, neither do the marxists.
Now, to some marxists, all of what Post-Keynesians and MMTers and Institutionalists are saying might seem as "cold-hearted or heartless"; that the aforementioned don't understand the quality side of Labor Theory of Value. Ok, finer points, got it. I will end this post with another claim made by the marxist in question with whom I debated.
He went on to tweet that the abolition of the state, of labor, and of capital is the way to go - the greatest goal to be achieved. Once again, respectfully, I asked myself, what the fuck does that mean? I'm all in favor of robots taking over man's toil, but you can never abolish labor completely. Labor, be it physical or mental, will always be something people will engage in - for their own interests or curiosities. That is what characterizes the human race, human creative reason. Secondly, how the hell are you going to abolish capital (land, money, machine tools, food, clothes etc)? The only way you're going to abolish labor and capital is if humans will evolve into immortal ethereal beings.
PS: A small comment of mine on post-scarcity theorists. Until things like water, food, warmth, and clothes will be in the same supply and ease of access as air - you're going to need a monetary system (a score keeping system) through which to facilitate economic activity.

Monday, 16 March 2015

US and Israeli Military Advisors Arrested In Iraq, Employed by ISIS Militia

Reports of the arrest of American military advisors assisting ISIS militants in Iraq constitutes evidence of cooperation between the US and the ISIS terrorist group in the Arab country, an Iranian lawmaker said.
Speaking to the Tasnim News Agency on Sunday, Mohammad Saleh Jokar said the US and the coalition it leads are not after tackling the ISIS, but pursue other objectives.

On Saturday, Iraqi sources reported that the Arab country’s counter-terrorism forces in an operation in an outlying area in the province of Nineveh have arrested four foreign advisors -three of them from the US and Israel- who were employed as military advisors to the ISIS fighters.

The arrest of American advisors made it clear for the world public opinion that the ISIS is a product of the US and Washington backs it, Jokar explained.

The detained foreign advisors have been transferred to a security center in capital Baghdad.

Since March 2, the Iraqi troops, backed by voluntary forces, have launched an offensive to recapture Tikrit and the surrounding areas.

The offensive is the biggest military operation in the province since the ISIS terrorists seized swaths of north Iraq last June and advanced toward the capital Baghdad.


Saturday, 14 March 2015

My patience with Varoufakis' euphemistic approach is wearing thin

I don't know if you guys watched the latest conference, in which Varoufakis told the press that the Troika policies for Greek have failed - according to Syriza's opinion and that of the Greek citizens - but I have. For Christ's sake, it's NOT an opinion, it is FACT.
Over 25% unemployment, over 60% unemployment of youth, massive rise of poverty and drop in personal (household) income. All of these facts spell out economic depression and humanitarian disaster - which will affect future generations nonetheless. This is just one part of Varoufakis' new language that he chose to adopt. I know that, like diplomatic language, political language is by definition euphemistic - but this is way too much. Besides, human beings think in language, and the quality of our thoughts can only be as good as the quality of our language. Yeah, yeah, Syriza was just recently sworn in, you're expectations are not reasonable - yeah, yeah, I get that. But I think I've read/seen enough of history and present to know when certain hopes placed in certain people become the first step on the road to disappointment.

Below is an article by Bill Mitchell, in which he talks about the similar views of others regarding Greece's real options.

Friday lay day – Faut-il donc haïr l’Allemagne?

Its my Friday lay day blog where I plan to write less here and more elsewhere. Today, a brief discussion of two interesting articles that I read recently. The blog title – Faut-il donc haïr l’Allemagne? (must we hate Germany?) – was the question posed recently by the French economist – Jacques Sapir – as a reaction to the way Germany (particularly its Finance Minister) handled the Greek request for less austerity and more flexibility in the recent Eurogroup encounters. His February 20, 2015 article (in French) – Haïr l’Allemagne? – concludes that the actions of Angela Merkel and Wolfgang Schäuble towards Greece have “repeated the sins” (“Les péchés répétés”) of the past and opened up old wounds that will further undermine the democracy in Europe. Sapir concludes that “Alors, disons-le, cette Allemagne là est haïssable”. What does that mean?
Read more here:

Right wing taxpayers alliance won't tell you this...

If we compare the PCS estimate of the tax gap with the DWP estimate of benefit fraud, we can see that benefit fraud is less than 1% of the total lost in the tax gap (see diagram opposite).
Employing more staff at HM revenue & Customs would enable more tax to be collected, more investigations to take place and evasion reduced. Compliance officers in HMRC bring in over 658K pounds in revenue per employee.

Monday, 2 March 2015

Check out my Hell March Industry and Future vid

Many of the world's problems come from the continued use of antiquated technology. The real constraint to a better and sustainable future is NOT money, but unused resources and idle labor (people willing and able to work). Money is an arbitrary/political constraint. It is a unit of account. It is a government issued liability. It is a private sector asset. Fiat money is nothing more than a tax-credit. The government debt, tax-credits outstanding.
Familiarize yourself with Modern Monetary Theory and pursue your own policies. Full employment and price stability is possible, and it's the better alternative to the neoliberal unemployed buffer stock of labor - which is a willful government policy meant to keep a percentage of the population in a state of permanent and involuntary unemployment.
All footage and music belong to their respective owners.

Sunday, 1 March 2015

Read an Ebook Week has begun!
Use the code RW100 at checkout to download my Of Hate And Laughter books for free. The same goes with any other ebooks that are enlisted for the full discount promotion, so browse at your leisure.

If you do download and read my work, and if you enjoy my writing, don't forget to show your appreciation by buying the books if you can afford it. If not, no worries; money is scarce for all of us. Smile
Thanks, and have a great spring!