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Randy and all:

 

I repeat my suggestion that we need to pay more attention to what we mean by ‘neoclassical” and suggest that all who want to understand the neoclassical approach read Tony Lawson’s article on how and why Veblen coined the term.

 

I also continue to think that little is gained by denigration of critics of various forms of heterodoxy by calling attention to arguments advanced (developing countries as toxic waste dumps or the record of women in science) unless it is shown how those arguments stem from ill-founded assumptions/methods that are also being used to criticize heterodox approaches.  Once again, I defer to Warren Gramm who warned against hunkering down in bunkers rather than careful argumentation.

 

That said, I do think that it has been very hard for a lot of heterodox economists, and particularly those who operate from the foundation of pragmatic philosophy to engage in careful argumentation because pragmatists can offer no absolute truths.  Truth evolves as does society.   The desire for certainty that has become so important in recent decades makes productive public discourse difficult but it does still go in in various think tanks and journals and it is important to maintain civil discourse there.

 

Now, let me turn to the other part of Randy’s response to my last posting and say that I find MMT more puzzling than scary.  And, in order to try to understand that which has puzzled me I have purchased the new book by Mitchell, Wray, and Watts and have been reading parts of it.  The whole is daunting as it is 600 pages of textbook material, much of which I already understand and was teaching long ago.   What I am searching for is a reasonably nuanced explanation of why the MMT proposition that the U.S. government can never default on debt denominated in its own currency”  seems to me to be taken as so important.  I understand the truth of this proposition but in a world in which even small shifts in the relative returns on the debt of nations on the international financial markets can alter holdings and lead to changes in the non-monetary sectors of economies, it seems to me that this is an issue that needs to be addressed.  Perhaps it has been and I am looking in the wrong places, so please help.   Let me add that I come to this question knowing that the U.S. dollar has not always been the reserve currency and I do know that the transition from the British Pound to the U.S. dollar in the first part of the 20th century was not smooth.  International money markets and their effects worry me but I do not see this addressed.

 

I also understand that the regressive effects of additional bond issues to finance additional government spending could be avoided by skipping the step or issuing the bonds and simply increasing reserves.  This is, I know, an emergency measure that has been used.  But advocating this as a routine measure seems to me to run counter to Fagg Foster’s emphasis on the principle of minimal dislocation.  Or, as I think Veblen would have put it in runs counter to the nature of evolutionary change. Again, this may have been addressed but I do not know where.

 

I also totally understand that the FED accommodates fiscal actions that are driven by Congressional action and the functioning of the economy.  But accommodation cannot easily be converted into power to cause.  That is why I remain so puzzled by the emphasis on monetary policy. Why not emphasize the joint importance of fiscal policy.  I realize that not everything can be done at once but I fear that MMT, with its heavy emphasis on monetary policy, may misdirect public discourse. 

 

Further, the heavy emphasis on full employment, or jobs for all, is, to me,  reminiscent of the Maginot Line.  Economies change and so do economic problems.  Dudley Dillard’s magnificent text, The Economic Development of the North Atlantic Community, was all about that.  Surely consistency with his approach and vision requires recognition of the changes in labor markets and expectations about labor participation that have occurred over the past 70+ years. 

 

Any help in sorting out these continuing puzzles will be helpful. 

 

Thanks, Anne

 

 

 

 

From: AFEEMAIL Discussion List <[log in to unmask]> On Behalf Of Wray, Randall
Sent: Wednesday, May 1, 2019 8:14 PM
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Are Sustainability and Public Choice schools of thought, per se?

 

First, I had thought Affee-ers would be familiar with Joan Robinson's term; "bastard" has a very specific and technical meaning--illegitimate birthing--in reference to the questionable lineage of modern macro. I did toy with the order of the phrasing in one of my sentences, as she put it first as a modifier. And yes, it was meant to be funny. Sorry that was so confusing.

 

And let me say I would not use this to describe actual birthing of humans as all creatures great and small are either birthed, hatched, or created--and there can be no illegitimacy for a birthed human.

 

Robinson applied it to ideas. I was applying it to those who try to package neoclassical economics as Keynesian. Geoff usefully added several others who have packaged heterodox ideas into neoclassical economics. Cross-breeding is rarely successful. As I said. Bastards are the result.

 

I'll leave it to John Henry to define Neoclassical Econ, as he taught me and then wrote the book on it. I think Geoff's definition isn't that useful. I recommend John's book "The Making of Neoclassical Economics" (if my memory serves me well). From the beginning this was a political agenda. Equilibrium and utility are diversions.

 

Now as to using bastard as a pejorative to describe actual neoclassicals. In my experience, yes, a lot of them do qualify. I can think back nearly 20 years ago when the AEA neoclassicals decided to cut AFEE panels to reduce the number of institutionalists who might show up at the meetings. They offered no rational explanation. As I recall, two of the neoclassicals stood up to defend us--Diedre McCloskey and Ed Leamer. The rest of them? Cut the panels. And they've continued to do that. Bastards? Your call. 

 

I've also had a lot of experience with bastards over the years--doing their best to exclude heterodox economists from positions, tenure, publications. I think many other Institutionalists and heterodox economists have, also. 

 

Summers has emerged as one of the main "Keynesian" critics of MMT. And is (hilariously) enlisted by a large number of heterodox economists--including FEMINIST LABOR ECONOMISTS!--in their critiques of MMT. Larry! who argues woman cannot do science. Larry! who argues we should view developing countries as toxic waste dumps. Larry! who helped to ensure CDSs could not be regulated by any government body. Yes, Larry is on OUR side.

 

Bastard? Your call.

 

It is funny that everyone now must take the opportunity to criticize MMT and distance themselves from it. No matter how irrelevant to the discussion at hand. MMT has got to be stopped. Why? Because there has not been any heterodox theory that has captured the attention that MMT has got over the past half century (or more). It must be stopped.

 

Why is it so damned scary? 

A. 

O.

C. 

 

There is no excuse for arguing from a position of ignorance any more. Bill Mitchell, Martin Watts and I have put out a textbook on it; almost 600 pages. AFEE folk are encouraged to read it and to point out where we've gone astray from Keynes's and Institutionalist teachings. I am confident that we've got Keynes right--confirmed by referees who said they'd never seen in a textbook an exposition that stayed so close to Keynes. I'm also confident that it is consistent with the Institutional theory advanced by Fagg Foster and Dudley Dillard--and I've published several articles in the JEI on that version. 

 

I cannot vouch for consistency with Anne's or Geoff's version. I would like to know where we went wrong. Please cite page and passage. Handwaves are no longer necessary.

 

L. Randall Wray

Senior Scholar, Levy Economics Institute

Papers: www.levyinstitute.org/publications/?auth=287

Co-editor Journal of Post Keynesian Economics
ISSN 0160-3477 (Print), 1557-7821 (Online)
www.tandfonline.com/toc/mpke20/current
http://www.tandfonline.com/toc/mpke20/current

New Book: Why Minsky Matters: An Introduction to the work of a maverick economist, Princeton University Press http://press.princeton.edu/titles/10575.html

 

New Book: Modern Money Theory: a primer on macroeconomics for sovereign monetary systems, Palgrave Macmillan http://www.palgrave.com/page/detail/modern-money-theory-l-randall-wray/?isb=9781137539908 

 

Please make note of my new email address as I will be transitioning all email to:

 


From: AFEEMAIL Discussion List <[log in to unmask]> on behalf of Mayhew, Anne <[log in to unmask]>
Sent: Wednesday, May 1, 2019 2:34 PM
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Are Sustainability and Public Choice schools of thought, per se?

 

I think Geoff makes a good and valid point.  Use of pejoratives and lack of attention to what it is that differentiates a group from one’s own is a sure sign of the kind of “camp meeting” attitude that Warren Gramm worried about among heterodox economists.  As a useful antidote I highly recommend Tony Lawson’s article on “What is this ‘School’ called Neoclassical Economics?”  This article, originally published in the Cambridge Journal of Economics (2013).  Tony’s article is a serious and in depth effort to determine what Veblen meant when he coined the name “neoclassical.”  In 2016 a collection of essays, edited by Jamie Morgan was published by Routledge under the title What is Neoclassical Economics?  Tony’s article is republished and there are many others including one that I wrote titled “Lawson, Veblen, and Marshall:  How to Read Neoclassicism.”  I would welcome feedback.

 

This discussion about “schools” can continue to be a useful one if it involves discussion of that preconceptions, tenets, methods are considered core and essential to each of the schools.  I, for example, am interested in knowing more about whether MMT, as it is discussed in political discourse, is consistent with Post Keynesian Economics and/or Institutionalism.  It seems to me not to be so but I am willing to be informed.

 

Here is to good and informed discussion.

 

--Anne

 

From: AFEEMAIL Discussion List <[log in to unmask]> On Behalf Of Wray, Randall
Sent: Wednesday, May 1, 2019 2:50 PM
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Are Sustainability and Public Choice schools of thought, per se?

 

No, I probably have a different definition of bastard in mind.

 

However some of those examples you listed would serve.

 

L. Randall Wray

Senior Scholar, Levy Economics Institute

Papers: www.levyinstitute.org/publications/?auth=287

Co-editor Journal of Post Keynesian Economics
ISSN 0160-3477 (Print), 1557-7821 (Online)
www.tandfonline.com/toc/mpke20/current
http://www.tandfonline.com/toc/mpke20/current

New Book: Why Minsky Matters: An Introduction to the work of a maverick economist, Princeton University Press http://press.princeton.edu/titles/10575.html

 

New Book: Modern Money Theory: a primer on macroeconomics for sovereign monetary systems, Palgrave Macmillan http://www.palgrave.com/page/detail/modern-money-theory-l-randall-wray/?isb=9781137539908 

 

Please make note of my new email address as I will be transitioning all email to:

 


From: AFEEMAIL Discussion List <[log in to unmask]> on behalf of Geoffrey Hodgson <[log in to unmask]>
Sent: Wednesday, May 1, 2019 7:35 AM
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Are Sustainability and Public Choice schools of thought, per se?

 

Dear AFEEers

 

Randy Wray has contributed much of value in his writings. The phrase “neoclassical bastards” (30 April) is not one of them.

 

It all depends how you define “neoclassical”. There is a controversy over the meaning of “neoclassical economics”. My suggestion would be to define it in terms of utility maximization and equilibrium. By this definition, most (but not all) of mainstream economics is neoclassical.

 

The assumptions of utility maximization and equilibrium are not ideologically neutral. But they are highly adaptable. Abba Lerner and Oskar Lange used them (within general equilibrium theory) to try to show how socialism can work. The same assumptions are adopted by Marxists such as John Roemer and (the late) Eric Olin Wright, as well as by post-Marxists such as Sam Bowles and Herb Gintis. They may all be wrong, but are they all “bastards”?

 

Randy may have a different definition of neoclassical in mind, but he should have made his meaning clear.

 

Best wishes

Geoff

 

In future, please use my [log in to unmask] address.

 

Geoffrey M Hodgson

Professor in Management at Loughborough University London

Editor in Chief, Journal of Institutional Economics

Secretary of the World Interdisciplinary Network for Institutional Research (WINIR)

Secretary of Millennium Economics Ltd

http://www.geoffreymhodgson.uk/

[log in to unmask]

 


From: AFEEMAIL Discussion List <[log in to unmask]> on behalf of Wray, Randall <[log in to unmask]>
Sent: 30 April 2019 11:24:39
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Are Sustainability and Public Choice schools of thought, per se?

 

Brian: my professor, Marc Tool, used to thunder against all "isms" and if you sat in the front of the class--as I did--he put the fear of god into you. I still hesitate before adding an ism to Institutional.

 

However as Paul Davidson always says, categorization is essential to building an understanding. As a kid you learn animal, vegetable, mineral and it helps to make sense of the world. You go on to species and learn about cats, dogs, and gold fish. There's a lot of variability across individuals, but more similarities within groups. They mostly mate with their own kind--but a few of the more adventurous try cross-species dallying. 

Ditto with schools of thought (at the extreme, isms). Individuals might protest mightily about pigeon-holing and that of course is unfair, but to build understanding the categorization is essential. And cross-species fertilization almost never works.

 

When I finally went on to grad school, a few months into the program, one of my fellow students told me that I was the only one (of 24 entering first years) who had an ideology. He had never heard of a school of thought. He had thought economics is just economics. 

Or, more precisely, economics is just math. Like many of those other students, he struggled trying to make sense of what the heck economics actually is, other than special purpose sets of math equations with no apparent links among them. He and many others did rather poorly that first year; I found grad school to be very easy because I knew which ideology the neoclassical bastards were trying to feed us. I knew it at least as well as they did--probably better. Neoclassicals are by far the most likely to protest that they are not neoclassical. 

 

I've always taken John Harvey's approach to teaching. Schools of thought is the first lecture in any and every class I teach. I cannot imagine making any sense of economics without that.

 

L. Randall Wray

Senior Scholar, Levy Economics Institute

Papers: www.levyinstitute.org/publications/?auth=287

Co-editor Journal of Post Keynesian Economics
ISSN 0160-3477 (Print), 1557-7821 (Online)
www.tandfonline.com/toc/mpke20/current
http://www.tandfonline.com/toc/mpke20/current

New Book: Why Minsky Matters: An Introduction to the work of a maverick economist, Princeton University Press http://press.princeton.edu/titles/10575.html

 

New Book: Modern Money Theory: a primer on macroeconomics for sovereign monetary systems, Palgrave Macmillan http://www.palgrave.com/page/detail/modern-money-theory-l-randall-wray/?isb=9781137539908 

 

Please make note of my new email address as I will be transitioning all email to:

 


From: AFEEMAIL Discussion List <[log in to unmask]> on behalf of Brian Eggleston <[log in to unmask]>
Sent: Monday, April 29, 2019 6:34 PM
To: [log in to unmask]
Subject: Re: [AFEEMAIL] Are Sustainability and Public Choice schools of thought, per se?

 

I really don’t mean to be too glib here but aside from crafting a text, why/how  does this matter?  I’m reminded of  Duke Ellington’s comment.  “There are two kinds of music. Good music, and the other kind.”  Perhaps “school of economic thought” (from an internal perspective) is really not much more than a variation on this expression; and also about as useful.  (John, this is not a critique of  your text.)   Perhaps a focus on economists' (broadly interpreted) ideas rather than filiation is more fruitful.  My comment is likely a reflection of my general disdain for what my mentor (Warren Gramm) termed “camp meetings.”  (He also wasn't big into loyalty oaths.)

 

The above aside, I appreciate anything which challenges the deeply entrenched perspective that there's really only one "good" economics and a bunch of the other kind.   So, as I said above, I'm not seriously dissin' your text.

 

Brian

 

On Mon, Apr 29, 2019 at 9:00 AM John Harvey <[log in to unmask]> wrote:

Dear All,

 

I am working on revisions to my Contending Perspectives in Econ book and one chapter that I originally intended to write was on ecological economics or econ of sustainability. The existing chapters cover Neoclassicism, Marxism, Austrianism, Post Keynesianism, Institutionalism, New Institutionalism, and Feminism.

 

Do you consider ecological econ/sustainability a school of thought , per se along the lines of those others or is it a topic area?

 

Similarly, I have a colleague who uses my book and she's very keen that I add a Public Choice chapter. Same question: school of thought or subject area?

 

Incidentally, she is an Austrian and yet there is no one in the department whose overall philosophy regarding pedagogy and curriculum matches mine more completely. She's a wonderful person. Who would have thought?!

 

John


--

John T. Harvey 
Professor of Economics

 

         

 

 


 

--

Brian Eggleston, Ph.D.

Department of Economics

Augustana University

Sioux Falls, SD 57197

 

 

Expose yourself to your deepest fear; after that, fear has no power and the fear of freedom shrinks and vanishes.  You are free.      Jim Morrison (The Doors)