This paper investigates the impact of different varieties of capitalism (VoC) on societal happiness. It begins with a critique of Neoclassical welfare economics which emphasizes Pareto optimality, and it argues for focusing on reported societal happiness. The paper identifies five VoC. Using a sample of twenty-six high-income countries drawn from the 2020 World Happiness Report, the paper shows societal happiness is systematically impacted by variety of capitalism type. Social Democratic economies report higher happiness levels. The US benefits from its standing as global economic hegemon, but it still reports lower happiness than Liberal and Social Democratic economies owing to its adverse societal relations. The public policy implication is the Social Democratic variety of capitalism produces greater societal happiness. More generally, happiness analysis can fill a gap in VoC theory and strengthen it by providing an operational form of welfare analysis. Making happiness the focus of attention will also likely change how economists interpret economies, which stands to change both economic theory and policy.
Varieties of capitalism and societal happiness: theory and empirics
September 25th, 2024Neoliberalism and the Drift to Proto-Fascism: Political and Economic Causes of the Crisis of Liberal Democracy
September 7th, 2024Neoliberalism is a political economic philosophy consisting of two claims, one economic and the other political. The economic claim is laissez-faire is the best way to organize economic activity as it generates efficient outcomes that maximize well-being. The political claim is free markets promote individual liberty. This article argues both claims are problematic. The evidence from the Neoliberal era shows Neoliberalism has undercut shared prosperity and unleashed illiberal forces that threaten liberty. The article distinguishes between the first political turn which established Neoliberal political hegemony, and the second political turn toward proto-fascism now underway. The second turn is being driven by a collection of factors which have created a demand for proto-fascism and weakened the defenses against alt-right ideas. Those factors include socio-economic disembedding, institutional destruction and political disembedding, increased economic inequality that tilts political power, transformation of attitudes to government and governance, transformation of economic identity, and behavioral transformation that celebrates sociopathic egotism. The Third Way’s capture of center-left politics means liberal elites occupy the political place that should be held by true opponents of Neoliberalism. Those elites obstruct the politics needed to reverse the deep causes of the drift to proto-fascism. Ironically, that makes them a real danger.
Keywords: Neoliberalism, proto-fascism, disembedding, inequality, identity, behavior
Ukraine’s Hiroshima moment is drawing closer (the consequences of Neocon madness)
August 21st, 2024In August 1945, the US atom bombed the Japanese cities of Hiroshima and Nagasaki. Since then, nuclear weapons have never been used in conflict. That may soon change as Ukraine faces the increasing likelihood of a Hiroshima moment.
Conditions in Ukraine increasingly give Russia military and geopolitical cause to use tactical nuclear weapons. Though Russia will use them, the US and NATO are deeply implicated in the process. They are in the grip of Neocon madness which casually dismisses potentially catastrophic consequences and blocks all off-ramps.
Lessons from Hiroshima and Nagasaki
One way to understand the current moment is via the history of the Hiroshima and Nagasaki bombings. Those attacks also had military and geopolitical motivations. The former is widely recognized: the latter is not.
Read the rest of this entry »Paul Davidson (1930-2024) and the founding of Post Keynesian economics
August 5th, 2024Paul Davidson was a critical figure in the preservation of John Maynard Keynes’s ideas, sticking with them when they were out of fashion. He was also key to the survival of the Post Keynesian school. Davidson endorsed Keynes’s liquidity preference theory of interest, and he emphasized fundamental uncertainty as a central feature of economic reality, essential to making sense of a monetary economy. His greatest legacy is the Journal of Post Keynesian Economics, the intellectual home for a generation of Post Keynesian economists. Without his efforts, the heterodox economics community would be significantly smaller than it is now.
The military-industrial complex as a variety of capitalism and threat to democracy: rethinking the political economy of guns versus butter
June 12th, 2024This paper examines the military-industrial complex (MIC), which is a prototype widely imitated by other business sectors. Collectively, they constitute a variety of capitalism which can be termed the poly-industrial complex (PIC). Understanding the MIC is critical to understanding contemporary US capitalism, US international policy, and the drift toward Cold War II. The MIC exerts a massive societal impact. It twists economic activity toward military spending; twists the character of technical progress; is socially corrosive via its capture of politics and government; twists societal understanding of geopolitics to increase demand for war services; promotes militarism and increases the likelihood of war; and promotes proto-fascist drift because militarism drips back into national politics. Given those features, the MIC is of first-order significance and the consequences of failure to understand it are likely to be grim. Politics is at the center of possibilities for change. That raises questions whether the demand for change can be mustered, and whether the political system will permit it.
Gaza in context: past, present, & future
May 18th, 2024Ilan Pappé is a brilliant Israeli historian & his scholarship exemplifies the meaning and importance of intellectual integrity. Below is a link to his talk titled “Gaza in context: past, present, & future”. I urge you to watch it & share it (the talk runs from minute 28 to minute 76). We all abhor Holocaust denialism. In that spirit, we have an obligation to confront denialism in other historical contexts.
Keynes’ denial of conflict: a reply to Professor Heise’s critique
April 13th, 2024Abstract. This note responds to Arne Heise’s critque of my article on Keynes’s denial of conflict in The General Theory. Heise’s response fails to show Keynes addressed conflict and makes several meritless criticisms regarding my treatment of Keynes and Keynesianism. It also fails to recognize the purpose of my article which was to show conflict is an essential part of capitalism; conflict is absent in Keynes’ magnum opus; conflict is absent in Neo- and New Keynesianism; though Kalecki introduced conflict in Keynesianism, much more remains to be done about recognizing its implications; and calling for revival of the economics of Keynes in bad times keeps policy locked in the orbit of stimulus and blocks recognition of need for policies addressing the economic consequences of conflict.
Keywords: conflict, Keynes, The General Theory, Kalecki, Neo-Keynesianism, New Keynesianism.
Read the rest of this entry »Rethinking conflict inflation: the hybrid Keynesian – NAIRU character of the conflict Phillips curve
April 11th, 2024This paper presents a new formulation of conflict inflation labeled the “pass-through” approach, which contrasts with the existing “pressure balance” approach. The model generates Phillips styled inflation – unemployment dynamics that are a hybrid of Keynesian and NAIRU dynamics. Conflict inflation arises when economic activity rises above the consistent claims activity level, and it is subject to self-propelled conflict accelerationism. Immediately below that level, inflation holds constant at the expected rate. At low activity, accelerating disinflation can develop. Worker militancy, corporate aggressiveness, negative supply shocks, and upward commodity price shocks all contribute to conflict inflation. They do so via two channels. First, they increase the intensity of conflict by increasing the degree of income claims inconsistency. Second, they lower the activity level at which conflict inflation kicks in. Policy can affect the consistent claims economic activity threshold at which conflict inflation kicks in. However, there may be adverse interaction effects with aggregate demand. Conflict inflation is best addressed by unconventional policies, such as incomes policy. Institutional developments in the Neoliberal era have likely reduced the relevance of conflict inflation.
Europe’s foreign policy has been hacked and the consequences are dire
February 13th, 2024Europe’s foreign policy has been hacked and captured by US Neocon interests. That capture poses a dire threat to both European democracy and global security. The threat to global security is because Europe is now captive in the US Neocon war on China and Russia. The threat to democracy comes from European voters gradually intuiting they have been sold out, which helps explain their turn against the political establishment.
The consequences of hacking are simple and dire, but exposing it is difficult. The status quo is privileged and there is resistance to acknowledging unpleasant facts. This essay presents those facts.
What is Neoconservatism and who are the Neocons?
The starting point is understanding Neoconservatism and the Neocons. The former is a US political doctrine which rose to ascendancy in the 1990s. It holds that never again shall there be a foreign power, like the former Soviet Union, which can challenge US global hegemony. The doctrine gives the US the right to impose its will anywhere in the world, which explains why the US has over 750 bases in 80 countries, ringing both Russia and China.
Read the rest of this entry »Israel’s genocide, US assistance, and consequences thereof
January 15th, 2024South Africa has now presented its charge of Israeli genocide in the International Court of Justice (ICJ), and Israel has presented its rebuttal. Regardless of the ultimate judgment, a page has been turned. Israel’s actions in Gaza, assisted by the US, have changed the geopolitical landscape. The consequences stand to be dire and lasting.
The case against Israel
The case against Israel is stark and simple. The argument in descending order of import is as follows.
First, and foremost, is Israel’s disproportionate response and application of collective punishment. Hamas is a criminal terrorist organization, not a state. Israel has a right to appropriate self-defense, but it has no right to kill vast swathes of non-combatant Palestinians as it tries to combat a criminal organization. The indiscriminate killing constitutes a war crime and crime against humanity. It becomes genocidal when paired with denial of means of survival.
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