Live from Evans Hall (Must-Read If You Could): Jeremie Cohen-Setton**: How Binding Is the Trilemma in a Currency Union?: Evidence from the Fed: The semi-autonomy of the regional reserve banks and...
Live from Evans Hall (Must-Read If You Could): Jeremie Cohen-Setton**: How Binding Is the Trilemma in a Currency Union?: Evidence from the Fed: The semi-autonomy of the regional reserve banks and...
Today's Economic History: Trevon Logan: The Transformation of Hunger Revisited: Reply: "The higher [early industrial] calorie levels reported in Gazeley, Newell, Bezabith (2015)...
...are a function of a conversion of food quantities to calories that is weighted towards contemporary, calorie-rich foods. Their conversion uses the full distribution of contemporary foods and should not be applied to historical populations. Since Gazeley, Newell, Bezabith assume that industrial workers in the past had access to contemporary foods, the revised calorie levels reflect contemporary diets rather than historical diets.
Daniel Davies: What would the German export sector look like?: "German Economic Thought and the European Crisis...
...What would the German export sector look like?
Just consider what the state of Germany’s export sector would be right now if Germany were not part of the euro, and had the real exchange rate of Switzerland.’
I’ve considered it, and I think the answer is actually ‘more or less the same’.
Lant Pritchett (2014): Can Rich Countries be Reliable Partners for National Development?:
"Time and time again I have seen NGOs and politicians in rich countries advocate that the poor follow a path that they, the rich, never have followed, nor are willing to follow." -John Briscoe (1948-2014), in memoriam.
FORTY-three years ago, the then-President of the World Bank, Robert McNamara, went to Somalia. As a partner in that country’s attempts at development in 1972, the World Bank pledged a loan of $32 million to build a port in the capital Mogadishu. The port was built and, while development went off track into conflict, the port still exists, still operates, and generates what few resources the struggling Somali state controls. Building a port was welcomed and seen by all as core to the mission of the International Bank for Reconstruction and Development, one of the five institutions that make up the World Bank Group.
Over at Project Syndicate: Depression’s Advocates: Back in the darker days of late 2008 and 2009, I had one line in my talks that sometimes got applause, usually got a laugh, and always made people more optimistic. Because the North Atlantic had lived through the 1930s, I would say, this time we will not make the same mistakes policymakers made in the 1930s. This time we will make our own, different--and hopefully lesser--mistakes.
Matthew Yglesias: America's 10 biggest cities, in every decade going back to 1790:
Over at Equitable Growth: most interesting thing about this, looking back, is my failure to fully believe--in spite of Japan since 1990, in spite of the global savings glut, in spite of so many things that make it seem obvious in retrospect--that the naive Hicksian short run--which had already lasted for three years--could last for, potentially, more than ten years:
The Interest Rate That Did Not Bark in the Night: The Surge in U.S. Treasury Debt and the Non-Reaction of Rates (Summer 2011): At the very start of the 2000s in the years of the Clinton budget surpluses--remember those?--the U.S. government was repaying its debt at the rate of $60 billion a quarter: each quarter saw $60 billion less of U.S. Treasury debt out there in the private market for savers to hold.
Over at Equitable Growth: It is a commonplace among Anglo-Saxon economists that Saxon-Saxon "ordoliberalism" was a post-World War II success only because somebody else--the United States--was both looking after the level of demand in the system as a whole, and also willing to act as an importer of last resort to allow other countries that had insufficient domestic demand to use the United States consumer to rebalance their individual economies at full employment even when domestic demand was grossly insufficient. READ MOAR
J Bradford DeLong and Barry J. Eichengreen: New preface to Charles Kindleberger,* The World in Depression 1929-1939*:
The parallels between Europe in the 1930s and Europe today are stark, striking, and increasingly frightening. We see unemployment, youth unemployment especially, soaring to unprecedented heights. Financial instability and distress are widespread. There is growing political support for extremist parties of the far left and right.
Both the existence of these parallels and their tragic nature would not have escaped Charles Kindleberger, whose World in Depression, 1929-1939 was published exactly 40 years ago, in 1973. Where Kindleberger’s canvas was the world, his focus was Europe. While much of the earlier literature, often authored by Americans, focused on the Great Depression in the US, Kindleberger emphasised that the Depression had a prominent international and, in particular, European dimension. It was in Europe where many of the Depression’s worst effects, political as well as economic, played out. And it was in Europe where the absence of a public policy authority at the level of the continent and the inability of any individual national government or central bank to exercise adequate leadership had the most calamitous economic and financial effects.
David Glasner: Trying to Make Sense of the Insane Policy of the Bank of France and Other Catastrophes: "I have occasionally referred to the insane Bank of France...
...or to the insane policy of the Bank of France, a mental disorder that helped cause the deflation that produced the Great Depression. The insane policy began in 1928 when the Bank of France began converting its rapidly growing stockpile of foreign-exchange reserves (i.e., dollar- or sterling-denominated financial instruments) into gold. The conversion of foreign exchange was precipitated by the enactment of a law restoring the legal convertibility of the franc into gold and requiring the Bank of France to hold gold reserves equal to at least 35% of its outstanding banknotes.
Over at Equitable Growth: Introduction
Olivier Blanchard, when he parachuted me into this panel, asked me to “be provocative”.
So let me provoke:
My assigned focus on “fiscal policy in the medium term” has implications. It requires me to assume that things are or will be true that are not now or may not be true in the future, at least not for the rest of this and into the next decade. It makes sense to distinguish the medium from the short term only if the North Atlantic economies will relatively soon enter a régime in which the economy is not at the zero lower bound on safe nominal interest rates. The medium term is at a horizon at which monetary policy can adequately handle all of the demand-stabilization role. READ MOAR
This strongly suggests to me that of the 7%-points by which Greek growth fell below IMF estimates in 2010-2011, 5%-points of that were due to the fiscal consolidation that the IMF had forecast would be imposed on Greece. Consider that the IMF had already expected the Greek economy under baseline to shrink by 4%-points, and for fiscal consolidation to shrink the Greek economy by 3%-points, and we have 4/5 of the damage to the Greek economy--relative to a counterfactual forecast under some zero-spending-austerity baseline was due to austerity.
I find this hard to square with the very-sharp Olivier Blanchard's contribution of today: READ MOAR
Must-Read: Hoyt Bleakley and Jeffrey Lin: History and the Sizes of Cities: "We contrast evidence of urban path dependence with efforts to analyze calibrated models of city sizes...
Over at Equitable Growth: Paul Krugman succumbs once again to shrill unholy madness: Ph'nglui mglw'nafh Friedman R'lyeh wgah'nagl fhtagn!! This time it is over the observation that, as I put it:
Via John the Lutheran: Alex Butterworth: The World That Never Was: "Childhood, individual liberty, the rights of man...
nothing was respected. It was a mighty letting loose of every sort of clerical fury — a St Bartholomew to the sixth power,
Rochefort would later record of the Semaine Sanglante, recalling the terrible massacre of Huguenots by Catholics 300 years earlier.
J. Bradford DeLong :: U.C. Berkeley and NBER :: April 16, 2013 http://eurofuture2013.wordpress.com/
My problem this morning is that I have four starting points. Or maybe my problem is that I have five starting points:
Over at Equitable Growth: Dean Baker once again marvels at the Washington Post's inability to figure out that the calculus of debts and deficits is fundamentally different today than back in the early 1980s. When long-term interest rates on government debt are 2%/year below the growth rate of the economy, things are very different from what they are when they are 3%/year above the growth rate of the economy. READ MOAR
Must-Read: Sharun Mukand and Dani Rodrik: The Political Economy of Liberal Democracy: "We distinguish between... property rights, political rights, and civil rights...
Live from La Farine: Scott Lemieux: The Party of Lincoln Is Now the Party of Jackson, and Vice Versa: "It’s not exactly news that Sean Wilentz’s punditry during the 2008 primaries was an embarrassment...
...But, via Chait, I somehow missed this definitive example....
Arthur Goldhammer: The Old Continent Creaks: Austerity and the failures of the technocratic elite have created the current populist backlash. France’s experience is instructive—and, possibly, ominous:
What’s the matter with Europe? Wherever one looks these days, there are signs of deep trouble. Economic growth has stagnated. Deflation threatens. Unemployment is rampant in many member states of the European Union. Support for the former mainstream parties of the center-right and center-left is waning. Populist parties of the far right and far left are on the rise. Anti-Islamic movements such as PEGIDA in Germany have attracted worrisome support, while in France the xenophobic National Front has topped all other parties in recent polls. Terrorist attacks by native-born citizens in Paris and Copenhagen have raised fears that the social fabric has irreparably deteriorated—fears compounded by the flight of several thousand young Europeans to join the Islamic State in Syria. And to top it all off, Ukraine has been racked by civil war and threatened with disintegration since Russian-backed separatists rejected the rule of the government in Kiev.
The parallels with the antinomies of the thought of the Ludwig von Mises of today--John Taylor--are, I think, rather striking:
In looking up some sources for my previous post on the gold-exchange standard, I checked, as I like to do from time to time, my old copy of The Theory of Money and Credit by Ludwig von Mises. Mises published The Theory of Money and Credit in 1912 (in German of course) when he was about 31 years old, a significant achievement. In 1924 he published a second enlarged edition addressing many issues that became relevant in the aftermath the World War and the attempts then underway to restore the gold standard. So one finds in the 1934 English translation of the 1924 German edition a whole section of Part III, chapter 6 devoted to the Gold-Exchange Standard.
Must-Read: Virginia Postrel: The Venus de Milo’s Arms: "The re-creation provides a plausible answer to a question posed...
A question of special interest to me right now because the departmental powers-that-be have decided to ask me to go back onto the 700-person Econ 1 Wheeler teaching line next spring...
Chris Y.: A colleague (middle grade civil servant) has sent this request to Mrs Y:
John Maynard Keynes (1936): The General Theory of Employment, Interest and Money by John Maynard Keynes: "A moderate increase in the quantity of money...
...may exert an inadequate influence over the long-term rate of interest [to restore full employment], whilst an immoderate increase may offset its other advantages by its disturbing effect on confidence...
: 1750 BC Problems: "Tell Ea-nasir:
Nanni sends the following message:
When you came, you said to me as follows:
I will give Gimil-Sin (when he comes) fine quality copper ingots.
You left then but you did not do what you promised me. You put ingots which were not good before my messenger (Sit-Sin) and said:
If you want to take them, take them; if you do not want to take them, go away!
Samuel Brittan--who I believe is extremely perceptive and penetrating (although not at all unsympathetic)--on Friedrich Hayek. From 'Hayek, Freedom, and Interest Groups,' in The Role and Limits of Government (London: Maurice Temple Smith, 1983):
The first page of the first chapter of Hayek's own Constitution of Liberty starts with the sentence:
We are concerned in this book with that condition of men in which coercion of some by others is reduced as much as possible.
J. Bradford DeLong on June 30, 2015 at 10:45 AM in Economics: History, Economics: Information, Economics: Macro, History, Moral Responsibility, Political Economy, Politics, Streams: (Tuesday) Hoisted from Archives, Streams: (Wednesday) Economic History, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (0)
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David Glasner: "[Murray] Rothbard’s selective quotation from the memorandum summarizing Strong’s 1928 conversation...
with Sir Arthur Salter, which I will discuss below, gives a very inaccurate impression of Strong’s position on money management...
Three things strike me while rereading Schumpeter's 1934 "Depressions" (and also his 1927 Explanation of the Business Cycle):
How much smarter Schumpeter is than our modern liquidationists and austerians--he says a great many true things in and amongst the chaff, which is created by his fundamentally mistaken belief that structural adjustment must be triggered by a downturn and a wave of bankruptcies that releases resources into unemployment. How much more fun and useful it would be right now to be debating a Schumpeter right now than the ideologues calling for, say, more austerity for and more unemployment in Greece!
How very strange it is for Schumpeter to be laying out his depressions-cause-structural-change-and-growth theory of business cycles at the very same moment that he is also laying out his entrepreneurs-disrupt-the-circular-flow-and-cause-structural-change-and-growth-theory of enterprise. It is, of course, the second that is correct: Growth comes from entrepreneurs pulling resources into the sectors, enterprises, products, and production methods of the future. It does not come from depressions pushing resources into unemployment. Indeed, as Keynes noted, times of depression and fear of future depression are powerful brakes halting Schumpeterian entrepreneurship: "If effective demand is deficient... the individual enterpriser... is operating with the odds loaded against him. The game of hazard which he plays is furnished with many zeros.... Hitherto the increment of the world’s wealth has fallen short of the aggregate of positive individual savings; and the difference has been made up by the losses of those whose courage and initiative have not been supplemented by exceptional skill or unusual good fortune. But if effective demand is adequate, average skill and average good fortune will be enough..."
How Schumpeter genuinely seems to have no clue at all that the business cycle is a feature of a monetary economy--how very badly indeed he needed to learn, and how he never did learn, what Nick Rowe and company teach today about the effects of monetary stringency on economic coordination.
Joseph Schumpeter (1934): [Depressions: What Can We Learn from Past Experience?](https://books.google.com/books?id=WVMUGqMU5bAC&pg=PA115&dq=schumpeter+depressions+are+not+simply+evils,+which+we+might+attempt+to+suppress&hl=en&sa=X&ei=rQ2QVZTfHsnvoASqpYaAAw&ved=0CCwQuwUwAg#v=onepage&q=schumpeter depressions are not simply evils, which we might attempt to suppress&f=false)
The problems presented by periods of depression may be grouped as follows: First, removal of extra economic injuries to the economic mechanism: Mostly impossible on political grounds. Second, relief: Not only imperative on moral and social grounds, but also an important means to keep up the current of economic life and to steady demand, although no cure for fundamental cases.
Third, remedies: The chief difficulty of which lies in the fact that depressions are not simply evils, which we might attempt to suppress, but--perhaps undesirable--forms of something which has to be done, namely, adjustment to previous economic change.
Today's Economic History: James Narron and Don Morgan: Crisis Chronicles: Railway Mania, the Hungry Forties, and the Commercial Crisis of 1847: "Money was plentiful in the United Kingdom in 1842...
...and with low yields on government bonds and railway shares paying handsome dividends, the desire to speculate spread—as one observer put it, ‘the contagion passed to all, and from the clerk to the capitalist the fever reigned uncontrollable and uncontrolled’ (Francis’s History of the Bank of England). And so began railway mania.
Over at Project Syndicate: As bubbles go, it was not a very big one.
From 2002 to 2006, the share of the American economy devoted to residential construction rose by 1.2 percentage points of GDP above its previous trend value, before plunging as the United States entered the greatest economic crisis in nearly a century. According to my rough calculations, the excess investment in the housing sector during this period totaled some $500 billion – by any measure a tiny fraction of the world economy at the time of the crash.
Comment of the Day: James Wimberley: Premier Je Suis, Second Je Fus, Mouton Ne Change: "I can't resist quoting François Villon's puff...
...for Chateau Balestard la Tonnelle, on the other side:
Ray Ginger: On Clarence Darrow: "Ray Ginger on Clarence Darrow, from Ray Ginger (1975), The Age of Excess: The United States from 1877-1914 (Prospect Heights, IL: Waveland Press: 0192486013954), pp. 358-9:
Lawyer: Clarence Darrow: The name of Clarence Seward Darrow (1857-1938) conjures up the Monkey Trial and Leopold-Loeb. He is remembered as the foremost defense lawyer of his generation, spokeman for the accused in dozens of murder trials. This view is badly distorted. He was a courtroom advocate only in his waning years. The truth is far more complex.
J. Bradford DeLong on June 18, 2015 at 07:01 AM in Economics: History, Economics: Inequality, History, Moral Responsibility, Philosophy: Moral, Political Economy, Politics, Streams: (Daily) Liveblogging History, Streams: (Wednesday) Economic History, Streams: Across the Wide Missouri, Streams: Economics, Streams: Equitable Growth | Permalink | Comments (1)
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bottlerocketscience: Startup Geometry Podcast EP 004: Brad DeLong:
J. Bradford DeLong on June 17, 2015 at 12:49 PM in Economics: Finance, Economics: Growth, Economics: History, Economics: Inequality, Economics: Information, Economics: Macro, Long Form, Philosophy: Moral, Political Economy, Politics, Science Fiction, Streams: (BiWeekly) Honest Broker, Streams: Cycle, Streams: DeLong FAQ, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (1)
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Live from the Garonne Estuary: Château Mouton Rothschild
Suppose you were heading from Bordeaux to London in the twelfth century by sea.
Suppose wanted to stop someplace to pick up something to use as ballast.
Where would you stop?
Yep. You would stop at what is now Château Mouton Rothschild on the left bank of the Garonne. That is the ideal place to stop, pick up whatever blast you need for ship stability, and rebalance your cargo before you head out beyond Isle de Cordouan into the waves of the North Atlantic.
What do you think the chances are that the best place in the world to grow grapes for making claret--the place with the absolute-best, ahem, terroir--just happens to also be the ideal place to pick up ballast for the Bordeaux-London voyage?
And, in fact, what are the odds that the sea-run ballast pick-up point would just happen to be for Bordeaux-London? That the sea run would be that between the capital of the lands that Eleanor d'Acquitaine brought to the Angevin Empire and the London capital and court of Henri II de Plantagenet?
"But what about the Burgundies?" you ask. Had not the Dukes of Burgundy managed to acquire overlordship of the seventeen provinces at the mouths of the Meuse and the Rhine, Burgundy would be nowhere. And the great days of the Burgundian court came to an end with the death of Charles the Rash...
Via Arthur Goldhammer:
Alexis de Tocqueville: Democracy in America: 2.10: (Democracy in America I.2.10): "Nowadays the dispossession of the Indians...
...is often accomplished in a routine and—one might say—perfectly legal manner.
J. Bradford DeLong :: University of California at Berkeley
Let me begin by thanking Matt Rognlie for doing some very serious and thoughtful digging into this set of factor-payments data. That digging leaves me in an ideal position for a discussant: There are interesting and important numbers. These numbers have not been put together in this way before. The author is wise enough not to believe he has nailed what the numbers mean to the floor. Thus I am in an excellent position to, if not add intellectual value, at least to claim a lavish intellectual-rent share of Matt Rognlie's product.
J. Bradford DeLong on June 12, 2015 at 11:06 AM in Economics: Growth, Economics: History, Economics: Inequality, Economics: Macro, Long Form, Political Economy, Politics, Streams: (BiWeekly) Honest Broker, Streams: (Wednesday) Economic History, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (10)
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Daniel P. Tompkins: What the Ancient Greeks Can Teach Us About Human Capital: "Unsupervised, cooperative Athenians developed an economy powerful enough to escape the Malthus trap...
The Rise and Fall of Classical Greece by Josiah Ober, Princeton University Press, 464pp. "Must it not then be acknowledged by an attentive examiner of the histories of mankind, that in every age and in every State in which man has existed, or does now exist, That the increase of population is necessarily limited by the means of subsistence? That population does invariably increase when the means of subsistence increase? And, That the superior power of population it repressed, and the actual population kept equal to the means of subsistence, by misery and vice?"
David Glasner enters the lists in the Omega Point discussion, making two big and important points:
There is an equilibrium in which the long-run comes quickly, and an equilibrium in which it comes so slowly that other things inevitably intervene. We do not know very much about what determines which the economy settles in, but we do strongly suspect from the Great Depression that sufficiently aggressive monetary régime change can eliminate the permanent-depression equilibrium
1931 was the once-in-a-century time for a monetary régime change in the twentieth century (and, if we are allowed one every half-century, 1978 was the time for the second). And it looks to him very much like 2009 was the time for a monetary régime change in the first half of the twenty-first century. That the Federal Reserve did not realize this in late 2009--that it expected a rapid recovery from the economy's self-equilibrating forces even without additional fiscal and monetary stimulus--is our sorrow today.
I agree with (2). I am less certain about (1).
I would say probably, and note that sufficiently aggressive in this case is a weasel phrase, and admit that I am surprised that Abenomics in Japan has not been more successful. But more on that anon. READ MOAR
Today's Economic History: Matthew Yglesias: Surplus content: "Keynes on bubbles...
...I think Chapter 22 of the General Theory is enduringly relevant:
It may, of course, be the case — indeed it is likely to be — that the illusions of the boom cause particular types of capital-assets to be produced in such excessive abundance that some part of the output is, on any criterion, a waste of resources; — which sometimes happens, we may add, even when there is no boom. It leads, that is to say, to misdirected investment. But over and above this it is an essential characteristic of the boom that investments which will in fact yield, say, 2 per cent. in conditions of full employment are made in the expectation of a yield of, say, 6 per cent., and are valued accordingly.
When the disillusion comes, this expectation is replaced by a contrary ‘error of pessimism’, with the result that the investments, which would in fact yield 2 per cent. in conditions of full employment, are expected to yield less than nothing; and the resulting collapse of new investment then leads to a state of unemployment in which the investments, which would have yielded 2 per cent. in conditions of full employment, in fact yield less than nothing.
We reach a condition where there is a shortage of houses, but where nevertheless no one can afford to live in the houses that there are. Thus the remedy for the boom is not a higher rate of interest but a lower rate of interest! For that may enable the so-called boom to last. The right remedy for the trade cycle is not to be found in abolishing booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom.
Think about Greece with its 'unsustainable' economy bolstered by government borrowing, or the US with its 'unsustainable' housing boom. Indeed, those particular arrangements could not be sustained forever. But why, when they unwound, were they replaced by a boom in unemployment? Surely it's not hard to come up with a higher-productivity sector for people to work in than the unemployment sector? To simply observe that the old arrangement suffered from some mis-valuation problems doesn't explain what's really mysterious and troubling about recessions.
Live from Evans Hall: When I arrived at 506 Evans Hall for this morning's workshop, this book was on the seminar table looking at me.
I think the ghost of John Hicks is weighing in on the inadequacy of Hicks (1937) as the thing you need to know to do policy-relevant macro with success...
Over at Equitable Growth: The question is: Why were we wrong? We had, after all, read, learned, and taught the same Hicks-Hansen-Wicksell-Metzler-Tobin macro that was Paul Krugman's foundation.
Yesterday I wrote: New Economic Thinking, Hicks-Hansen-Wicksell Macro, and Blocking the Back Propagation Induction-Unraveling from the Long Run Omega Point: The Honest Broker for the Week of May 31, 2015
And now I see Paul Krugman writing:
Paul Krugman: Backward Induction and Brad DeLong (Wonkish) - NYTimes.com: "One more thing: Brad says that we came into the crisis...
...expecting business cycles and possible liquidity-trap phases to be short. What do you mean we, white man?
Touché... READ MOAR
Étienne Mantoux says: Britain and America must allow France to impose a satisfactory peace upon Nazi Germany in 1945--one that places Germany under sufficient territorial, military, political, and economic burdens that it will thereafter lack the power to dominate Europe politically and militarily. If they do not, then perhaps, after 200 years of trying to control or contain Germany, France and the rest of Europe will ally with it. And that would fix those Britons and Americans:
At that time--or, rather, in that logical state to which the economy will converge if values of future shocks are set to zero--expected inflation will be constant at about the 2% per year that the Federal Reserve has announced as its target. At that time the short-term safe nominal rate of interest will be equal to that 2% per year of expected inflation, plus the real profits on marginal investments, minus a rate-of-return discount because short-term government bonds are safe and liquid. At that time the money multiplier will be a reasonable and a reasonably stable value. At that time the velocity of money will be a reasonable and a reasonably stable value. Why? Because of the powerful incentive to economize on cash holdings provided by the the sacrifice of several percent per year incurred by keeping cash in your wallet rather than in bonds. And at that time the price level will be proportional to the monetary base. READ MOAR
Spring 2016: Departmental:
Spring 2016: Economic History:
To put on mailing list:
Postponed to 2016-2017?:
Simon Galle and Dmitri Koustas
Over at Project Syndicate: Putting Economic Models in Their Place:
Among the voices calling these days for new--or at least substantially different--economic thinking http://ineteconomics.org is the very sharp Paul M. Romer http://paulromer.net/ of New York University, with his critique of what he calls "Mathiness" in modern economics http://paulromer.net/mathiness/. He seems, to me at least, to be very worried principally about two aspects of modern economic discourse. The first is to take what is true about one restricted class of theories and generalize it, claiming it is true of all theories and of the world as well.
Note to Self: Rereading Etienne Mantoux: La Paix Calomniée, ou les Conséquences Économiques de M. Keynes. "The Calumniated Peace" of Versailles. OK. So why is the title of the English translation The Carthaginian Peace? Who decided to replace "Caluminiated" with "Carthaginian", and why?
With his fascination Keynes combines another of the serpent's attributes--his disconcerting ability to molt at more or less frequent intervals, leaving his former conceptions behind him like so many old integuments from which the reader, somewhat disconcerted, must extract himself, having previously been at no little trouble to get in.... We are to witness a revolution. At least so one would gather from some of the more enthusiastic reviews, which go so far as to make Keynes (much to his disgust no doubt) the direct successor of Karl Marx. "My undertaking is one that has no equal, that none will ever equal. I would change the basis of society, shift the axis of civilization..." Is that facetious to place Proudhon's ironic boasts beside Keynes' ambitious sureness? Yet their two proposals are not so very unlike, for it is by decline of the rate of interest to zero that the latter would see our economic ills remedied. Curious that the most sharp-tongued economist of our time should come back, by this unexpected route, to the thought of the famous inventor of "credit gratuit"...
Note to self:
Perhaps I imposed too much of my own preconceptions on Skidelsky. But I had always seen Skidelsky as arguing that Keynes saw:
Cf: Stephen A. Schuker (2014): J.M. Keynes and the Personal Politics of Reparationshttp://www.tandfonline.com/loi/fdps20
John Maynard Keynes: The Economic Consequences of the Peace: "Very few of us realize with conviction the intensely unusual, unstable, complicated, unreliable, temporary nature
Over at Equitable Growth Paul Romer inquired why I did not endorse his following Krusell and Smith (2014) in characterizing Piketty and Piketty and Zucman as a canonical example of what Romer calls "mathiness". Indeed, I think that, instead, it is Krusell and Smith (2014) that suffers from "mathiness"--people not in control of their models deploying algebra untethered to the real world in a manner that approaches gibberish.
I wrote about this last summer, several times: READ MOAR
Via Ta-Nehisi Coates: John C. Calhoun: Slavery a Positive Good: "I do not belong... to the school which holds that aggression is to be met by concession...
...Mine is the opposite creed, which teaches that encroachments must be met at the beginning, and that those who act on the opposite principle are prepared to become slaves. In this case, in particular I hold concession or compromise to be fatal. If we concede an inch, concession would follow concession–compromise would follow compromise, until our ranks would be so broken that effectual resistance would be impossible. We must meet the enemy on the frontier, with a fixed determination of maintaining our position at every hazard. Consent to receive these insulting petitions [seeking from the senate a constitutional amendment abolishing slavery], and the next demand will be that they be referred to a committee in order that they may be deliberated and acted upon.