Keynes’ General Theory was a huge step forward relative to classical economics, but it was also a step backward in its denial of the conflictual nature of capitalism. There is need to understand Keynes’ technical contributions regarding the workings of monetary economies, but also need to understand the flaws within his thinking and the consequences thereof. Keynes made a fundamental contribution elucidating the mechanism of effective demand, and he also has claim to be the preeminent monetary theorist. However, his critique of classical economics was technocratic and focused on the interest rate mechanism. Reflecting his own liberal political economic disposition, he denied the conflictual nature of capitalism. That is the “original sin” in Keynesian economics, and it has far-reaching implications. It explains why establishment Keynesian economics struggles to explain the current tendency to stagnation. Even more importantly, it has kept economics locked into a false conception of capitalism that undermines the case for Social Democracy.
Keynes’ denial of conflict: why The General Theory is a misleading guide to capitalism and stagnation
February 21st, 2023World Cup, RT CrossTalk, and US domestic censorship
December 17th, 2022Most of the time I write dense blogs & research papers. I sent the e-mail below to someone close to me. Afterward, I realized it tacitly says a lot about the state of our society (liberals included). Sometimes, mixing things and writing about them in a different way can be revealing.
Read the rest of this entry »Deglobalization, conflict, & the self-inflicted threat to democracy: consequences of US imperial over-reach
December 14th, 2022Because of the seriousness of the world situation, I have decided to get back in the business of doing interviews (which I do not enjoy doing). Here is a link to my interview (13/12/2022) on RT CrossTalk discussing “New Globalization?”
In that connection, here is a link to a paper (written in 2018) titled “The Fracturing of Globalization: Implications of Economic Resentments and Geopolitical Contradictions”. It significantly anticipated and predicted recent global political economic developments.
Comments on the history of the Review of Keynesian Economics on its tenth anniversary
November 12th, 2022This Fall (October/November 2022) marks the tenth anniversary of the founding of the Review of Keynesian Economics (ROKE). The founding co-editors were Louis-Philippe Rochon, Matias Vernengo, and I. At the beginning of 2018 Louis-Philippe Rochon stepped down to become sole editor of the Review of Political Economy and he was replaced by Esteban Pérez Caldentey.
Since then, ROKE has further enhanced its reputation, becoming a leading heterodox economics journal as measured by its Clarivate citation score. It also has premier standing for official research assessment purposes in France, Italy, and Brazil.
Active plans for the journal were set in motion in late 2011 and the first issue was published in Autumn 2012. That first issue includes a founding statement by the three co-editors which lays out the motivation for establishing the journal, its scope, and its purpose. The statement is on ROKE’s website. I think it has aged very well and there is not much in it that I would change today. I encourage people to read it.
Read the rest of this entry »The false promise and bitter fruit of Neoliberalism: political economic disembedding, cultural transformation, and the rise of proto-fascist politics
October 11th, 2022Neoliberalism is a political economic philosophy that consists of two claims, one economic and the other political. The economic claim is free market laissez-faire economies are the best way to organize economic activity as they generate efficient outcomes that maximize well-being. The political claim is free market economic arrangements promote individual liberty. This paper argues both claims are problematic. The evidence from the forty-year experiment that began in 1980 shows Neoliberalism has undercut shared prosperity and unleashed illiberal forces that threaten liberty. The paper distinguishes between the first political turn which saw the establishment of Neoliberal political hegemony, and the second political turn toward proto-fascism that we are now experiencing. 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 cultural 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 liberal elites obstruct the politics needed to reverse the deep causes of the drift to proto-fascism. Ironically, that makes those elites a real danger.
Sabotaging Germany, blaming Russia: another view of the Nord Stream pipeline attack
October 1st, 2022Imagine Moscow was nuked yesterday, and this morning The New York Times ran a frontpage headline “Moscow nuked: Russia proves its hostility to Europe again”. Sounds pretty crazy? Yet, in a manner of speaking, that is what happened last week.
On Tuesday September 27th three major leaks caused by undersea explosions were discovered in the Nord Stream gas pipelines connecting Russia and Germany. The New York Times evening e-mail briefing, which is sent to nine million readers, headlined “suspicion of Russian sabotage”. The Wednesday European edition ran a similar headline accompanied by comments about the attacks proving Russian aggression against Europe.
The same take echoed in the UK. The conservative Telegraph newspaper ran a headline “Nord Stream sabotage mapped: how Putin could have carried out the attack” along with a photo of Vladimir Putin in a submersible. Meanwhile, the progressive Guardian ran a headline about a “new phase of hybrid war” against Europe with the sub-title accusing Russia of suspected sabotage.
Read the rest of this entry »How the West betrayed Mikhail Gorbachev and seeded the Ukraine conflict
September 1st, 2022Mikhail Gorbachev died on August 30, 2022. Since then, praises have flowed from Western leaders. Those praises obscure how the West betrayed Gorbachev after he fell from power, and how that betrayal seeded the Ukraine conflict.
The story is complicated because Gorbachev’s fall was triggered by Communist Party hardliners, so the troubles which befell Russia thereafter are also significantly due to Russian actions. That said, Gorbachev sought a partnership for peace, prosperity, and democracy. After he fell, the West reneged on its handshake agreement with him.
A tribute to Gorbachev’s inspiring vision
Before turning to the details of that betrayal, a tribute to Gorbachev is warranted. Gorbachev sought to transform the Soviet Union from a closed repressive system into an open consultative socialist system that would be part of the European family. That aspiration was described as glasnost (openness) and was pushed through the Perestroika reform movement.
Read the rest of this entry »Theorizing dollar hegemony, Part 1: the political economic foundations of exorbitant privilege
August 23rd, 2022This paper explores dollar hegemony, emphasizing it is a fundamentally political economic phenomenon. Dollar hegemony rests on the economic, military, and international political power of the US and is manifested through market forces. The paper argues there have been two eras of dollar hegemony which were marked by different models. Dollar hegemony 1.0 corresponded to the Bretton Woods era (1946-1971). Dollar hegemony 2.0 corresponds to the Neoliberal era (1980-Today). The 1970s were an in-between decade of dollar distress during which dollar hegemony was reseeded. The deep foundation of both models is US power, but the two models have completely different economic operating systems. Dollar hegemony 1.0 rested on the trade and manufacturing dominance of the US after World War II. Dollar hegemony 2.0 rests on the Neoliberal reconstruction of the US and global economies which have made the US the center of global capitalism and the most attractive place to hold capital. It is a financial model and intrinsically connected to Neoliberalism. Consideration of dollar hegemony leads to two further questions. One is whether there is a better way of organizing the world monetary order, which is associated with debate about the possibility of a new Bretton Woods. The other is what is the future of dollar hegemony?
Flirting with Armageddon: the US and Ukraine
August 13th, 2022It is now almost six months since the beginning of Russia’s invasion of Ukraine, and with each passing month the Biden administration has ratcheted up US participation in the conflict. That ratchet process has the US flirting ever closer with nuclear Armageddon, a momentous development that has gone almost uncommented and uncontested. It is as if the US is sleepwalking, eyes wide shut.
The political background
US engagement in the Ukraine war has been driven by the Democratic Party, enthusiastically supported by its traditional allies in the mainstream media and establishment intellectual class – also known as the liberal blob. That has made criticism of the war difficult for two reasons.
First, the liberal blob has promulgated an edict of silence against those who challenge its explanation of the war and the case for US participation. The edict applies to conservatives who argue “it’s not our war”, and to independent critics who argue the war has been “made in the USA” via a thirty-year slow-motion attack on Russia conducted through eastward expansion of NATO and regime change subversion in the republics of the former Soviet Union.
Second, the US is engaged in a life and death struggle for its own democracy, with the Republican Party having gone off the rails through its embrace of Donald Trump’s protofascism. That struggle poses an awful dilemma, as criticizing the Biden administration’s Ukraine policy risks opening the door for the protofascists.
With nuclear Armageddon a possibility on the horizon, the stakes are too high for silence. The truth about the war, the Democratic Party, and the liberal blob must be spoken. There is still time to reverse course, and public opinion is capable of mastering two issues. It can both reject Republican protofascism and demand reversal of the policy of Ukraine escalation.
Toxic takeover: the Neocon capture of the Democratic Party
The starting point is blunt admission that President Biden and his national security team have put the US within spitting distance of nuclear armageddon. That has been done for a war with no bearing on US vital national security interests.
Worse yet, it is not an accidental misjudgement. Instead, it reflects the comprehensive capture of the Democratic Party by the most extreme Neocon foreign policy thinking. That thinking calls for the US to seek global military hegemony, which Democrats have wrapped in a cloak weaved of the lie of democracy promotion and the delusion of US moral exceptionalism.
Read the rest of this entry »Neoliberalism and the Road to Inequality and Stagnation: A Chronicle Foretold
April 29th, 2022My latest book has recently been published by Edward Elgar.
The book explores the impact of neoliberal policies on the US, Europe, and the global economy. It shows how the 2008 financial crisis and Great Recession were predictable outcomes of the neoliberal policy experiment, as is the emergence of global “race to the bottom” competition. It also explains how Europe’s economic fragility is connected to the neoliberal design of the euro. Neoliberalism creates a particular variety of capitalism and is a political choice. That means society is tacitly engaged in a “war of ideas”, the outcome of which will influence our future political economic trajectory.
The book is available HERE. The cheapest option is the e-book purchased via Googleplay (price = $13.11).