Here’s the Spring Quarter 2014 edition of the Coyote Economist. The lead article, written by CSUSB Economics Professor Daniel MacDonald, reviews Thomas Piketty’s new book “Capital in the Twenty First Century”.
Here’s the Winter Quarter Coyote Economist. The lead article deals with the political economics of the minimum wage.
I have been very busy the last few months and, as a result, have put this blog on the back burner. But, I intend to get back into writing more consistently after this quarter is over. In the meantime, here’s the latest Coyote Economist I wrote for the department. It has a short piece on the anti-statist nonsense central to rightwing ideology.
The Spring Quarter Coyote Economist has just come off the press. It contains information on our newest faculty member – Professor Daniel MacDonald, employment prospects for Econ majors, the student club – Econ Radicals, tentative teaching schedule for next academic year, and End of the Academic year festivities. You can read it here.
Dean Baker. “If economics were like astronomy, the experts in the field would all be calling for the government to spend what is needed to boost growth. But economics is not like astronomy. When [the Reinhart and Rogoff study a] key piece of evidence arguing for austerity was discredited, many experts just doubled down.”
But, unlike astronomy, economics has traditionally served it’s ideological role very well, supplying arguments that have the patina of being "scientific" and are acclaimed as sound and beyond reproach not because they properly explain economic relationships but because they give voice to the dominant ideology. It fulfills its ceremonial function very well …
See on truth-out.org
Dean Baker does a nice job in Worms, Pond Scum and Economists of laying out the pattern of thinking, ideology, that governs (with a few exceptions) the political and punditry class over the “crisis” confronting Social Security and Medicare, and mainstream economists’ inability to understand the housing bubble and its negative consequences. He correctly notes that mainstream economists have been largely “AWOL when it comes to prescribing the medicine to rescue the patient.”
There is a close relationship between the political economic ideas viewed as legitimate in capitalist society and ideas viewed as meritorious in the discipline of economics. This is not unique to the current time period, but has been a long-standing feature of the relationship between the political culture of capitalism and dominant economic theories. The inability of mainstream economists to offer appropriate solutions to the Great Recession was not the result of timidity, but rather the result of a decades-long movement within the discipline to bury Keynes with differing versions of the notion that competitive market systems are efficient and, most importantly, reflect the reality of existing capitalism. Monetarism, Rational Expectations morphed into New Classicism, Real Business Cycle arguments, and DSGE modeling, have all contributed to the blinding of the discipline to the instability of capitalism and the fragility of the financial sector. What’s more, its underscored the tendency to view the market system as forever hovering about full employment equilibrium, quickly moving back to that equilibrium if displaced by “random” exogenous shocks. Government, in this view of things, is more often than not the source of such shocks and, as such, should be kept from “interfering” in the system.
In short, free markets work well – indeed efficiently – and should not be tampered with by government. But this argument has been a feature of bourgeois culture since the beginning of capitalism. The business class is forever going on about the efficiency of the market and the inefficiency of government; the bourgeois rallying cry has always been “leave government out of the market”, unless business acumen dictates subsidizing or saving a corporation or two. And within the profession, the notion that free market systems generate outcomes that benefit society as a whole either through economic growth or efficiency or both, has been around since Adam Smith and David Ricardo and is a central theme of the current crop of neoclassically inspired macroeconomists. The suggestion, as made by Keynes – but also Marx, Veblen, Kalecki, and Minsky, that the free market system may not move toward efficient outcomes or may not bring about benefits to society as a whole is taboo.
It’s important to not lose sight of the cultural role played by the discipline of economics in providing arguments intended to celebrate capitalism. Economics plays an important ceremonial role in bourgeois culture, one that almost always trumps its role as science intended to explain things as they really are.
To my CSUSB fans, the Winter Quarter 2013 Coyote Economist has just come out. We have an article on Students for Quality Education, The Model United Nations at CSUSB, and the nonsense surrounding the current national debate on the deficit, debt and the federal budget. You can read it here.