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Seminar on supply-side economics is classical economic theory

June 16, 2016

This is a trial run for a paper I will be delivering next month, first at Freedomfest in Las Vegas and then at the Chinese Economic Society Australia meeting in Cairns. Supply-side economics is classical economics. If you are going to understand the first you can only do it by understanding the second. The details:

You are warmly invited to School of EFM Research Seminar presentation by our Associate Professor Steve Kates. Your host is Dr Ananta Neelim.

Title: Political Economy in Crisis: Were the Classical Economists Right After All?

Abstract: There are, generally speaking, five streams of macroeconomic thought that compete for allegiance in the modern world.

  • Keynesian which comes in many varieties all of which argue recessions are due to failure of aggregate demand and which deny the validity of Say’s Law
  • New Classical based on rational expectations but with no embedded theory of recession
  • Austrian which typically ignores aggregations, where activity is driven by marginal utility and which builds a theory of recession based on structural imbalances caused by financial dislocation
  • Marxist and other forms of socialist theory whose aim is to centralise economic decisions and whose main focus of analysis are exploitation of the working class and concern with inequality
  • Classical which emphasises the supply-side of the economy, focuses on the role of the entrepreneur, sees recessions as due to structural imbalances which may come from a variety of causes and explicitly incorporates Say’s Law.

The aim of the paper is to argue that economic theory reached its deepest and most profound level in the writings of the late classical economists which flourished over the period from the publication of John Stuart Mill’s Principles in 1848 through until the publication of John Maynard Keynes’s General Theory in 1936. The paper will discuss the classical framework and contrast this approach with the alternatives that today compete for the allegiance of economists.

Date: Friday 17 June 2016

Venue: RMIT University Building 80, Level 11 Room 9 – 445 Swanston Street between Franklin and A’Beckett Streets

Time: 10.30am-12.00pm; Seminar runs 11.00am to 12.00pm

Morning tea will be served at 10.30am. If you would like to come, please RSVP through email esther.ng@rmit.edu.au

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