Classical theory explained

I’ll be in Canberra for the first three days of next week for the meeting of the History of Economic Society of Australia where I will be giving a presentation on the actual meaning and significance of “classical” economic theory. I am therefore putting up a post from way back in history that I did in 2011, so ancient that Maurice Newman was the Chairman of the ABC and I was still being published at The Drum. The rest of this post is what I said then. But before I get to that, I will put up this quote from a brief article on me [my name even comes first in the article’s title!] which you may find in the latest edition of the Journal of the History of Economic Thought:

“Steven Kates is probably the best-known present-day proponent of the old ‘classical’ macroeconomics of Jean-Baptiste Say, James Mill, David Ricardo, and John Stuart Mill.”

But as I say in the heading in the slide, I am probably the “best-known” because I am probably the only one in existence. It was also, let me assure you, not intended as a compliment. Anyway, here is what I wrote back then.

__________

I have an article up at The ABC’s Drum website where I again look at the statement by the ABC’s Chairman, Maurice Newman, on the value of classical economic theory in comparison with the modern. Here was the full quote from his speech:

We may think we are all Keynesians now, but perhaps contemporary teachings of Keynes are not faithful to the original doctrine, or, maybe, Keynes is now a defunct economist. Perhaps post modernist economics has so captivated our journalists that they have suspended the spirit of enquiry, open-mindedness and scrutiny that an informed democracy so desperately needs.

Under relentless pressure, classical economics has become all but a relic of a bygone era. Yet the work of classical economists most likely holds the solution to today’s economic ills.

The point that Maurice Newman was making was that journalist really ought to take a look at the economic ideas of the classical economists, which using the modern Keynesian definition incorporate every economist before Keynes himself, with the exception of Malthus, Hobson, Major Douglas and Gesell (who these last three are you might very well ask, but this is Keynes’s very own and very short list). As for the rest, they were consigned by Keynes to the dustbin of history, whose theories are only kept alive by a very small band of economists scattered across the world.

In the article, I quote Alfred Marshall, arguably the greatest economist to emerge from the nineteenth century. As I wrote on The Drum, Marshall “was very specific about not mistaking an economic recession for a failure to spend and he very much thought of himself as following in the tradition of the classical economists. This is what he wrote in his Principles of Economics:

[This is] the attitude which most of those, who follow in the traditions of the classical economists, hold as to the relations between consumption and production. It is true that in times of depression the disorganization of consumption is a contributory cause to the continuance of the disorganization of credit and of production. But a remedy is not to be got by a study of consumption, as has been alleged by some hasty writers … The main study needed is that of the organization of production and of credit.

Demand deficiency was not an idea discovered by Keynes. It was an idea about as old as economics itself and had been thoroughly debated and rejected for a hundred years before Keynes came along. And the fact of the matter is, there is not an economist in a hundred who could tell you in a convincing way why demand deficiency had been seen by classical economists as the province of cranks. They would also be unable to tell you what the classical theory of recession actually was. All they have is what they were told by Keynes, the very last man in the world from whom anyone should try to learn what classical economists had said.

Newman’s point is exactly right. Why don’t our journalists (and economists) show enough curiousity to find out what those classical economists said and wrote. We might still reject classical theory when we have examined their theories and ideas. But then again there is the possibility, a possibility that grows stronger by the day as we move towards another downturn, that classical economists actually did know more about the causes of recessions and their cures than we are currently led to believe.

My goodness, a golfing tweet about Hillary by the President of the United States!

The vid is by Mark Dice:

A hilarious retweet by President Trump of an animated gif showing him hit Hillary Clinton with a golf ball caused the liberal media to absolutely freak out. Subscribe now for more videos every day, and I’ll see you tomorrow!

I’m sure not everyone found it hilarious. And do I have to point out that Hillary was not really hit by a golf ball hit by PDT or anyone else, but fell over by herself?

My thanks to max for sending this along.

What really matters is not what actually matters but who decides what matters

This is a twitter stream on Big Brother and Protecting Elections which really is not just funny but also relevant and serious.

And speaking of Facebook, let me also mention this: Mark Zuckerberg’s Fake News Problem Isn’t Going Away. From which:

In early September, Facebook disclosed that it sold $100,000 in political ads during the 2016 election to buyers who it later learned were connected to the Russian government. Richard Burr of North Carolina and Mark Warner of Virginia, the most senior Republican and Democratic members of the Senate Intelligence Committee, have said they’re considering holding a hearing, in which case Zuckerberg could be asked to testify.

Meanwhile, special counsel Robert Mueller has made Facebook a focus of his investigation into collusion between the Russian government and Donald Trump’s campaign. A company official says it’s “in regular contact with members and staff on the Hill” and has “had numerous meetings over the course of many months” with Warner. On Sept. 21, Zuckerberg said the company would turn over the ads to Congress and would do more to limit interference in elections in the future. Facebook acknowledges that it has already turned over records to Mueller, which suggests, first, that the special counsel had a search warrant and, second, that Mueller believes something criminal happened on Zuckerberg’s platform. . . .

On Sept. 14, ProPublica reported that it had managed to purchase ads targeted at users who’d listed interests such as “Jew hater” and “How to burn Jews.”

Well they’ve stopped that now, but only after it was pointed out to them. Every new technology not only changes the way people find things out but also what things they find out. I am therefore a free speech absolutist which is why we should make it illegal for Facebook or Twitter and other platforms of the same kind to prevent people from saying things there that are perfectly legal to say anywhere else.

An historical turning point

This is the sub-title which explains the point of the article: Obama had to spy on Trump to protect himself. Here are the last three lines:

The left is sitting on the biggest crime committed by a sitting president. The only way to cover it up is to destroy his Republican successor.

A turning point in history is here.

If Obama goes down, the left will go down with him. If his coup succeeds, then America ends.

Now read the rest.

The more you look at things the more miraculous Trump’s win is

A round-up of the latest non-news on the Democrats, media and crony capitalists in the US.

Behind his [ie Obama’s] political espionage of Trump.

Hillary Clinton’s campaign memoir rests on an astonishingly audacious lie: that the very FBI director who made her campaign possible by improperly sparing her from an indictment doomed it. A normal pol who had mishandled classified information as egregiously as Hillary would have felt eternal gratitude to Comey. Only an entitled ingrate like Hillary would have the gall to cast her savior as the chief thorn in her side.

Nor does Hillary acknowledge another in-kind contribution to her campaign from Comey: his willingness to serve as a cog in Obama’s campaign of political espionage against Trump. Obama’s team of Hillary partisans, which included among others John Brennan, Susan Rice, and Loretta Lynch, wanted Comey to snoop on Trumpworld and he duly did.

It was reported this week that the FBI had until as recently as earlier this year been intercepting the communications of Paul Manafort, one of Trump’s campaign chairmen. This means that Comey, contrary to his lawyerly denial of Trump’s wiretapping claim, had the means to eavesdrop on any communications between Manafort and Trump.

Wiretaps may prove Trump right — and that’s absolutely terrifying

The more we learn about the last eight years and eight months, the more reason there is to believe that something is rotten in Washington.

I don’t just mean the ordinary corruption of the swamp variety. I mean something fundamental, something that suggests major elements in our government believe they, and not the people, are sovereign.

Which brings us back to the ultimate test: Did Obama or somebody working for him put Trump under surveillance during or after the election for the purpose of a political coup?

It’s a frightening question, all the more so because I suspect the answer will be yes — if we can ever get to the truth.

Samantha Power sought to unmask Americans on almost daily basis, sources say

Samantha Power, the former U.S. ambassador to the United Nations, was ‘unmasking’ at such a rapid pace in the final months of the Obama administration that she averaged more than one request for every working day in 2016 – and even sought information in the days leading up to President Trump’s inauguration, multiple sources close to the matter told Fox News.

As Evidence of Election Fraud Emerges, the Media Wants to Keep You in the Dark.

If you have no idea what happened at the second meeting of President Donald Trump’s Advisory Commission on Election Integrity in New Hampshire on Sept. 12, I’m not surprised.

Though a horde of reporters attended the meeting, almost all of the media stories that emerged from it simply repeated the progressive left’s mantra that the commission is a “sham.”

Almost no one covered the substantive and very concerning testimony of 10 expert witnesses on the problems that exist in our voter registration and election system.

The witnesses included academics, election lawyers, state election officials, data analysts, software experts, and computer scientists.

The existing and potential problems they exposed would give any American with any common sense and any concern for our democratic process cause for alarm.

And just think how much else there almost certainly is but virtually no one will report a thing. When you realise a madman is simultaneously developing nuclear weapons along with ICBMs that could incinerate Los Angeles or Sydney and the left/media alliance is still talking about Russia hacking the election you know you are looking insanity straight in the eye.

Give Peace a Chance is NOT Peace at Any Price

It is hard to believe that LIQ was actually ever a general if he cannot see how fortunate we are that Donald Trump is President and not Hillary and no longer Obama. I particularly find it wonderful how invisible Obama has become since he has nothing to say about anything that would not make people on his own side wince at their stupidity. A cipher before and a cipher since, but alas, eight disastrous years as president in between. For a very good summary of what Trump said at the UN and why it matters, there is this which you can enjoy end to end. Much to choose from, but North Korea has almost disappeared from the news since the Democrats, and the left in general, have nothing constructive to add to the conversation, which is why the media have dropped this as a story. So let me focus here.

In particular, and in detail, Trump called out the rogue states of North Korea and Iran. He did not follow a script of pollysyllabic diplomatic enumerations of unacceptable activities. He reminded the UN members of Pyongyang’s “deadly abuse” of American student Otto Warmbier. He talked about North Korea’s kidnapping of a Japanese 13-year-old girl “to enslave her as a language tutor for North Korea’s spies.” And he cited “the assassination of the dictator’s brother using banned nerve agents in an international airport.”

He caused a stir, and inspired plenty of headlines, with his comments:

“The United States has great strength and patience, but if it is forced to defend itself or its allies, we will have no choice but to totally destroy North Korea. Rocket Man is on a suicide mission for himself and for his regime.”

That’s not bombast. That’s a pointed and useful warning to a totalitarian tyrant, who in contravention of nine UN sanctions resolutions and all basic decency has been threatening preemptive nuclear strikes on the U.S. and its allies, advertising the testing of hydrogen bombs and shooting intercontinental ballistic missiles over Japan. Let’s hope Kim Jong Un takes it seriously, despite decades of U.S. compromise and retreat that led to this pass.

As for the derision implicit in the label “Rocket Man,” I’d say that Trump in describing the murderous despot of North Korea displayed a distinct delicacy simply by avoiding the use of raw profanity from the UN podium. Would it have been better to deferentially describe Kim as the supreme leader of North Korea? Mockery has its uses in facing down despots. The confrontation here is of North Korea’s making — and the dangers have grown all the worse over the years for such nonconfrontational approaches as the nuclear deals of Presidents Bush and Clinton, and the do-nothing “strategic patience” of President Obama.

And I don’t wish to leave out this which will be quoted far into the future:

“The problem in Venezuela is not that socialism has been poorly implemented, but that socialism has been faithfully implemented. From the Soviet Union to Cuba to Venezuela, wherever true socialism or communism has been adopted, it has delivered anguish and devastation and failure.”

How long has it been since we have heard any political leader say things like that, never mind an American president? Our enemies are not only our worst enemies, they are their own worst enemies but are too ignorant even to know that.

Donald Trump’s speech to the UN

Starts 45 minutes in. You can either watch it yourself or let his enemies interpret it for you. As good as any speech of its kind you have ever heard, and it holds its strength right to the end. From Drudge: