I also wrote offline on to Stephen Marglin on 15 December after I posted my public reply on the thread he began. He has replied to the post by James Ahiakpor but has not replied to mine. This is what I wrote:
Dear Professor Marglin
I am writing to you off line which I hope you will not mind. I was completely serious when I wrote that I was not at first sure whether or not you were agreeing with me because you are possibly the first person outside of those whom I have dealt with personally, to write something on this topic that was fresh and interesting and which I could largely agree with. I can honestly ask why it is you would not line up against this Keynesian nonsense. You could not possibly believe that earthquakes are good for economic growth or that building pyramids – the epitome of a non-productive public works program – could enrich a community. I know that money obscures the operation of an economy and is part of the reason that things do from time to time go wrong but that is merely a re-statement of page one of any classical work on the business cycle. The problem for any economy is that it is the sum total of billions of decisions made across vast geographical regions in which everyone is trying to adjust to what they believe the future will be like, a future about which there are no facts of any kind to base any decision upon. There are facts about the past and the present. just none at all about the future, and the more distant that future, the more hazy everyone’s conjectures must be.
And to me, not only is Keynesian economics wrong, it is wrong because Say’s Law is right. I won’t waste your time if this doesn’t interest you so I will close with a few additional bits I would like to bring to your attention and then leave any further contact to you.
· From Wikipedia I see you teach the ‘anti-Mankiw’ course at Harvard. Think of my doing the same down here. I have even written my own book to go with the course: Free Market Economics: an Introduction for the General Reader. Since no one else will say it, I will say it for myself: it is the best introductory book on economic theory in the world, an easy claim for me to make since it is the only book in the world that actively warns students against Keynesian macro while teaching them what it is in as traditional a way as you could hope. That book will therefore give someone a better grounding in economics than any other book I know. If you can suggest another I would be very interested to read it. It is all about dynamic adjustment in a politically driven economic environment where entrepreneurial decisions are what gives an economy its direction while rabidly having absolutely nothing to do with laissez-faire.
· In July, I gave a presentation at a conference in Istanbul on the empirical work being undertaken by your colleague, Alberto Alesina. His empirical work demonstrates there is something to classical economic theory. You cannot get his results if reductions in public spending really do reduce the rate of growth. You can get his results if classical economists were right about Say’s Law. I will attach a copy of the paper I gave which has now been published in The Atlantic Economic Journal.
· I will also attach the article on the intellectual origins of The General Theory which I mentioned in my post to SHOE. Following the threads that understanding Say’s Law reveals to me brings some things to light that are invisible to other economists who have been brought up on the traditional white bread form of economic theory.
I really thought your post was great and I am grateful that you took the time to write it. If we keep acting as if more directionless and valueless government spending makes economies stronger we economists will be responsible for the greatest economic catastrophe since the Mississippi Bubble. And it really will be our fault.
With kindest best wishes