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  1. #21
    psicobolche tcda's Avatar
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    Quote Originally Posted by Shaunward View Post
    Chicago and Austrian schools have explanations for crises under a market economy. Neither while doing undergrad and postgrad economic studies, did I once hear the expression 'bourgeois economists', what does that mean?
    What's the Chicago school theory of crisis? I had understood they treated crises empirically, but did not have a theory of why crisis is inherent to capitalism regardless of government policy or the actions of the capitalists. Isn't their theory basically that governments facilitate the pumping of too much currency into the economy? I apologize if I'm wrong on that.

    Of course that is a ridiculous theory. Also it wouldn't explain why Pinochet, on following all the policies proposed bythe "Chicago Boys" as they were known, and having Friedman as a top adviser, was forced to sack them all in 1982 when their policies plunged Chile into a depression.

    Btw a bourgeois economist is one who dedicates themselves to proposing ways to administer capitalism, rather than explaining the need to overthrow it.
    "Of course we spent our money in the good times. That's what you're supposed to do in good times! You can't save money in the good times. Then they wouldn't be good times, they'd be 'preparation for the bad times' times."

    "Every country in the world owes money. Everyone. So heere's what I dont get: who do they all owe it to, and why don't we just kill the bastard and relax?"

    -Tommy Tiernan, Irish comedian.

  2. #22
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    Quote Originally Posted by tcda View Post
    What's the Chicago school theory of crisis? I had understood they treated crises empirically, but did not have a theory of why crisis is inherent to capitalism regardless of government policy or the actions of the capitalists. Isn't their theory basically that governments facilitate the pumping of too much currency into the economy? I apologize if I'm wrong on that.

    Of course that is a ridiculous theory. Also it wouldn't explain why Pinochet, on following all the policies proposed bythe "Chicago Boys" as they were known, and having Friedman as a top adviser, was forced to sack them all in 1982 when their policies plunged Chile into a depression.

    Btw a bourgeois economist is one who dedicates themselves to proposing ways to administer capitalism, rather than explaining the need to overthrow it.
    They would theorise that we haven't experienced actual capitalism, so these crises aren't necessarily because of capitalism. I'm inclined to agree with that part.

    Just because crises are looked at empirically doesn't make them not theories. They're theories and yes, they have to do with government control of currency. At this time, I don't feel that comfortable with explanation, but it's an explanation nonetheless. You said no other school has a theory.

    By such a definition, every person with degrees in economics I've met is a bourgeois economist. How many formally educated economists are non-bourgeois economists, as a %? This is interesting.

  3. #23
    psicobolche tcda's Avatar
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    Quote Originally Posted by Shaunward;1026096[QUOTE
    ]They would theorise that we haven't experienced actual capitalism, so these crises aren't necessarily because of capitalism. I'm inclined to agree with that part.

    Just because crises are looked at empirically doesn't make them not theories. They're theories and yes, they have to do with government control of currency. At this time, I don't feel that comfortable with explanation, but it's an explanation nonetheless. You said no other school has a theory.
    Obviously schools of economics will have theories on why crises happen. If they didn't even have that they wouldn't even have a right to exist.

    I said no other school has a theory on why crises are inherent to capitalism.

    The chicago School can claim we haven't experienced "real capitalism", but their policies when implemented have not even lessened the tendency to crisis, but rather worsened it.

    You can't argue that it's inflationary government policies which cause crisis, and then, when the government cuts social spending, deregulates the banking sector and implements free trade measures, and this results ins an increased propensity to crisis, not a lesser one, then simply argue that "well they didn't go far enough".

    My point being: the tendency to crisis of capitalism exists equally, even when governments implement opposite economics policies. The post-war Keynesian boom ended in a crisis of the model. The noeliberal model has been in regional crises since its inception, and has now reached its first global crisis which has discredited the economic orthodoxy of the past 3 decades.

    No School of eocnomics other than Marxism, has a theory to explain that.

    By such a definition, every person with degrees in economics I've met is a bourgeois economist.
    Maybe. What's your point?

    How many formally educated economists are non-bourgeois economists, as a %? This is interesting
    I don't know. Many active communsits I know got first class degrees in economics (though I'd rather recruit 1 worker than a 100 economists, personally), and mostly laugh at what they were taught in their classes, and think the only use for learning it was to better polemicise against it.
    "Of course we spent our money in the good times. That's what you're supposed to do in good times! You can't save money in the good times. Then they wouldn't be good times, they'd be 'preparation for the bad times' times."

    "Every country in the world owes money. Everyone. So heere's what I dont get: who do they all owe it to, and why don't we just kill the bastard and relax?"

    -Tommy Tiernan, Irish comedian.

  4. #24
    Senior Member Survive & Stay Free's Avatar
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    I don't agree, although I can't specifically say where I disagree with you because you haven't provided your specific argument. I don't believe capitalism necessitates a perfectly competitive market and that there will always be administrative costs. From such observations alone, I don't see how 'from each according to etc.' is the ethical basis for capitalism. Please explain specifically?
    I'm unsure what you mean about perfect competition or admin costs, anyway, from each according to their ability, to each according to their needs could as easily be a way of describing a market performing at optimal allocative efficiency.

    Everyone works, selling their labour power, intellect, skills, whatever and earns wages, therefore has disposable income, exhibit their needs and the demand stimulates supply.

    Its a very simple economic paradigm but its also vague and it could describe a market, it could describe central planning, in fact it could describe just about anything as Marx and Engels were famously averse to any kind of prophetic or predictive speculations.

    Its a little like the quote from adam smith that any society in which the vast majority were in want could not be considered to be prospering, I dont have the exact wording but it could pass for a commie criticism of capitalism instead of a capitalist criticism of feudalism. And so the story goes, one generation's radical is the next's neo-conservative, properly so called.

  5. #25
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    Quote Originally Posted by tcda View Post

    Obviously schools of economics will have theories on why crises happen. If they didn't even have that they wouldn't even have a right to exist.

    I said no other school has a theory on why crises are inherent to capitalism.
    Are you talking about the business cycle? I get the impression you're saying that nobody says, specifically, what Marxism says, but rather, their own version. Neoclassical and Austrian schools have their own theories of the business cycle, but they're going to be looking at it from a different perspective than Marxism. I don't know how specific you're being - does the business cycle count?

    Quote Originally Posted by tcda View Post
    The chicago School can claim we haven't experienced "real capitalism", but their policies when implemented have not even lessened the tendency to crisis, but rather worsened it.
    Could say the same of soviets and communism.

    Quote Originally Posted by tcda View Post
    You can't argue that it's inflationary government policies which cause crisis, and then, when the government cuts social spending, deregulates the banking sector and implements free trade measures, and this results ins an increased propensity to crisis, not a lesser one, then simply argue that "well they didn't go far enough".
    If you've ever studied institutional economics (and done sufficiently well), you'd know that it often isn't about "more regulation" or "less regulation", but about the specific qualities of the regulation and policies themselves. Take this recent financial crisis - it was a combination of market forces and regulation that caused it. Either "more regulation" or "less regulation" could have made it less of a crises, depending on the specific quality of the regulation enacted or revoked.

    Quote Originally Posted by tcda View Post
    My point being: the tendency to crisis of capitalism exists equally, even when governments implement opposite economics policies. The post-war Keynesian boom ended in a crisis of the model. The noeliberal model has been in regional crises since its inception, and has now reached its first global crisis which has discredited the economic orthodoxy of the past 3 decades.

    No School of eocnomics other than Marxism, has a theory to explain that.
    It's called the period of market correction of the business cycle in neoclassical economics.

    Quote Originally Posted by tcda View Post
    Maybe. What's your point?
    My point is that it's not a very common distinction to make. Does capitalism personally upset you? How well-read are you in academic economics beyond Marxian economics?

    Quote Originally Posted by tcda View Post
    I don't know. Many active communsits I know got first class degrees in economics (though I'd rather recruit 1 worker than a 100 economists, personally), and mostly laugh at what they were taught in their classes, and think the only use for learning it was to better polemicise against it.
    Yet these active communists you know are unaware of the workings of institutional economics, potentially the factors of production or the business cycle? The business cycle is one of the most common themes in any first-rate school of economics. If they say that Marxian economics is the only school to address it, then either they're lying to you or they're using such an obscure definition that only Marxian economics addresses it.

    Quote Originally Posted by Lark View Post
    I'm unsure what you mean about perfect competition or admin costs, anyway, from each according to their ability, to each according to their needs could as easily be a way of describing a market performing at optimal allocative efficiency.

    Everyone works, selling their labour power, intellect, skills, whatever and earns wages, therefore has disposable income, exhibit their needs and the demand stimulates supply.
    Optimal allocative efficiency doesn't work because of administrative/transaction costs and perfect competition. Read Coase's Theory of the Firm - it's based entirely on this.

    Quote Originally Posted by Lark View Post
    Its a very simple economic paradigm but its also vague and it could describe a market, it could describe central planning, in fact it could describe just about anything as Marx and Engels were famously averse to any kind of prophetic or predictive speculations.
    Except for predicting the future of the global economic systems?

    Quote Originally Posted by Lark View Post
    Its a little like the quote from adam smith that any society in which the vast majority were in want could not be considered to be prospering, I dont have the exact wording but it could pass for a commie criticism of capitalism instead of a capitalist criticism of feudalism. And so the story goes, one generation's radical is the next's neo-conservative, properly so called.
    Pure capitalism cannot exist in the sense of purely competitive markets, though. That's because purely competitive markets could not exist. Early contributions to economics were great, but they've since been built on by people after Adam Smith.

  6. #26
    Senior Member Survive & Stay Free's Avatar
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    Global economic systems? Would Marx have known the terminology? Sort of post dates his times dont you think? How much of a time you havent lived in or imagined can you be expected to know about?

    Anyway, most of his predictions were accurate enough, trends like monopolisation have carried on just like he predicted, economies are more central plan than ever but they're still private rather than public management, wages do decline, as does available work and class struggles are probably still the most important thing in determining economic and social policy.

    Hmm, yeah, I know about perfect competition being an ideological construct. You've a straight posting style, like you're in a competition and trying to out wit me with book smarts. Good luck with that
    Last edited by Survive & Stay Free; 01-30-2010 at 07:28 PM. Reason: smilies edit

  7. #27
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    Quote Originally Posted by Lark View Post
    Global economic systems? Would Marx have known the terminology? Sort of post dates his times dont you think? How much of a time you havent lived in or imagined can you be expected to know about?
    I believe a question asked in this thread was if anybody thought Marxian economics were outdated. Would this not qualify as some element of it being outdated?

    Quote Originally Posted by Lark View Post
    Anyway, most of his predictions were accurate enough, trends like monopolisation have carried on just like he predicted, economies are more central plan than ever but they're still private rather than public management, wages do decline, as does available work and class struggles are probably still the most important thing in determining economic and social policy.
    Smith worried about such things before Marx. I wouldn't say these were ideas that originated with Marx. Marx's observations varied from very right to very wrong. Those things he was right on, aren't really becoming more correct. They seem to be fading as more things become outdated.

    Quote Originally Posted by Lark View Post
    Hmm, yeah, I know about perfect competition being an ideological construct. You've a straight posting style, like you're in a competition and trying to out wit me with book smarts. Good luck with that
    No. I'm woefully underequipped in philosophy and sociology - I've studied neither outside of economics. Anything I know I've picked up while focusing on microeconomics. My studied field within economics isn't the political or sociological end of it, but the financial end. I'm a banker, not a statesman or philosopher. Furthermore, I am drunk.

  8. #28
    psicobolche tcda's Avatar
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    Shaunward: You're the economics student mate, you tell me if a business cycle is the same as a theory of crisis. :p I mean the fact that they reduce a generalized crisis of the eocnomic system and society, which can throw millions of people on the scraphead, rewrite the conditions of work and life fr the workers, wipe out the savings of the middle classes etc., to a "business cycle", surely tells you all you need to know.

    I think it's different to a real "theory of crisis" because, free market idealogues will tell you, that if you just let the market take its course, different business cycles will correct themselves quicker, and you can avoid generalized crises of the system. So they have a theory of what governments are doing wrong that's causing generalized crises, but not a theory of why capitalism itself goes into generalized crisis, periodically.

    Now, we can see they are wrong, because everywhere that free market measures have been implemented, if anythign they have increased the tendency to generalized crisis of the system! Not let the "business cycles" smooth themselves out. Chile was the first country in the world to try out Friedman's policies, and by 1982 Pinochet was forced to sack all the Chicago boys from his cabinet! (though he brought them back later - always the way, "socialization of loss" in times of crisis, "privatization of profit" in times of boom).

    Regarding the other question you raised about "surely the communsits do the same" (ignore reality): well, I'm a Trot bastard, and Trotsyists point to the progressive effects of a planned economy, while saying that, obviously if the leadership betrays the revolution, it will eventually collapse. This is different from liebrtarians who just equally dismiss all forms of capitialism when they fail as "socialism" and don't even bother to check what effect was had when some or a lot of their ideas were implemented. It's not that governments "didn't go far enough" because the aspects of their policies that were implemented had the effect of causing economic crisis pretty much everywhere!
    "Of course we spent our money in the good times. That's what you're supposed to do in good times! You can't save money in the good times. Then they wouldn't be good times, they'd be 'preparation for the bad times' times."

    "Every country in the world owes money. Everyone. So heere's what I dont get: who do they all owe it to, and why don't we just kill the bastard and relax?"

    -Tommy Tiernan, Irish comedian.

  9. #29
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    Do you have a specific question or statement you want me to address? I mean no disrespect whatsoever, but that is just a wall of rant.

  10. #30
    psicobolche tcda's Avatar
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    Quote Originally Posted by Shaunward View Post
    Do you have a specific question or statement you want me to address? I mean no disrespect whatsoever, but that is just a wall of rant.
    It's an argument...I made claims and backed them up with examples. Seems fine to me but whatever. It's really up to you if you want to reply or not.

    My overall "statement of fact" can be simplified for you: Marxists aren't the ones beign "surprised" by the way things are going, we are the only ones who understand why both Keynesianism and freemarket cycles, end in generalized, system-wide crisis.
    "Of course we spent our money in the good times. That's what you're supposed to do in good times! You can't save money in the good times. Then they wouldn't be good times, they'd be 'preparation for the bad times' times."

    "Every country in the world owes money. Everyone. So heere's what I dont get: who do they all owe it to, and why don't we just kill the bastard and relax?"

    -Tommy Tiernan, Irish comedian.

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