Thomas Palley

Below is a link to an article by Argentine political economist Rubén Lo Vuolo on the environmental crisis in Argentina. He forcefully links the crisis with class interest. In my view, that is how it must be situated and analyzed, and that is the only way we will succeed in reining it in. Unfortunately, that framing of the crisis is insufficiently articulated in much heterodox analysis, especially of the Post Keynesian variety.

Latin America is one of the regions most affected by extreme weather events, registers the highest number of crimes against planetary health defenders, and uses collective natural resources for the benefit of affluent minorities. The Argentine government is a promoter and accomplice of these demonstrably harmful actions.

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This summer I have been reading selections from Antonio Gramsci’s Prison Notebooks. The Gramscian construct of cultural hegemony is brilliantly insightful and something every political economist should be aware of. The notebook entries are also very akin to blogs in construction and length.

Given my recent suspension by the Post Keynesian Economics Society (PKES) for posting an announcement of an article on the political economic impacts of the Ukraine war (“The Ukraine war and Europe’s deepening march of folly”), that has prompted me to wonder if Gramsci would have also been banned had he posted his notebook entries from his prison cell? Sadly, the answer seems to be “Yes”.

This paper presents a theory and model of long-run cycles in income inequality. The model explains the historical pattern of income distribution identified by Kuznets (1955) and Piketty (2014). It breaks with conventional marginal product theory which claims functional income distribution is determined by the technological conditions of production. Instead, it emphasizes the role of socio-political forces that shape and drive fluctuations in the level of popular political organizations, which then impact distribution. That impact includes assessment and attribution of productivity contributions. The model provides a framework for interpreting the historical evolution of income distribution and inequality, and for reflecting on current conditions and possible future developments. The core message is twofold. First, socio-political developments matter for income distribution. Second, if those developments are cyclical, income distribution will also exhibit cyclicality.

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(1) The Post-Keynesian Economics Society (PKES) committee has posted a second more detailed public statement seeking to justify my suspension. In my view, their new statement further obscures the issue and is even more misleading.

The only thing that matters is did the article (“The Ukraine war and Europe’s deepening march of folly”) which triggered my suspension violate the listserve rules?

The committee has persistently avoided that question as the article is clearly compliant, being economics related and widely published. Now, the committee invokes a history that may reveal additional past wrongdoing on its part.

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.

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Paul 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.

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