A Flea in the Fur of the Beast

“Death, fire, and burglary make all men equals.” —Dickens

Keynes/Hayek (the review after I finished the book)

by pdxblake

As presumptuous as it seems, reviewing Keynes Hayek a third of the way throught was absolutely the best thing I think I could have done (here’s the link).  I finished the book today and I have to say it was a bit of a snoozer from the point when I wrote the review to the end (I literally fell asleep twice reading it, but that may say more about my couch than it does about the book).  The entirety of the book’s premise is that Hayek was called in to refute Keynes’ argument starting with his Treatise on Monetary Policy. That book, and later editorials and short papers was a predecessor to Keynes’ signature work, the General Theory of Employment, Interest and Money.  However, the initial confrontation in the pages of the journal Economica were the last substantive debate between Keynes and Hayek.

The remainder of the book shapes the sad life of Hayek from the early 1930s through his Nobel Prize in the 1970s (a move by the Nobel committee to prove they didn’t have a liberal bias).  It included a move to Arkansas so he could more easily divorce his wife to marry his cousin (I shit you not) and on to Chicago where the economics department was not interested in hiring him.  His Road to Serfdom was deemed “too popular a work for a respectable scholar to perpetrate [and it was] all right to have him at Chicago so long as he was not associated with the economists”.  Instead, he became professor of social and moral science.

After Hayek’s Nobel prize, the book moves into the Reagan and Thatcher period and more or less ignores Hayek as the creator of new economic thought, but focuses on the rise of Monetarism and supply side economics and how it was or was not based on Hayek’s thinking.  Finally, it concludes with the Lesser Depression that began in 2008, which resulted in a quick readoption of Keynesianism as the economy was on the brink of repeating the Great Depression.  The book concludes with an enticing summary that encapsulates a theme of the book: the optimism that Keynes embodied and the deep pessimism of the libertarian/Hayekian worldview.  The final paragraph of the book is a lengthy quote from John Kenneth Galbraith, a preeminent economist who carried on the tradition of Keynes who noted that:

Keynes was exceedingly comfortable with the economic system he so brilliantly explored.  So the broad thrust of his efforts, like that of Roosevelt, was conservative; it was to help ensure that the system would survive.  But such conservatism in the English-speaking countries does not appeal to the truly committed conservative…Better to accept the unemployment, idled plants, and massive depair of the Great Depression, with all the resulting damage to the reputation of the capitalist system, than to retreat on true principle…When capitalism finally succumbs, it will be to the thunderous cheers of those who are celebrating their final victory over people like Keynes”.

With the fight over raising the debt ceiling, and the Tea Party willingness to allow the US government to default in their pursuit of draconian spending cuts during an already weak recovery from twin real estate and financial bubbles, perhaps we can see clearly the Hayekian ideal, and the wisdom that Galbraith expressed in 1983.

And lest you think this is another Keynes celebrating liberal tome, look at the credentials of the author, Nicholas Wapshott.  He wrote a book called Ronald Reagan and Margaret Thatcher: A Political Marriage, and wrote for the London Times and the short-lived New York Sun, which had as its editorial perspective: “limited government, individual liberty, constitutional fundamentals, equality under the law, economic growth … standards in literature and culture, education.”

“An Undertaking Of Great Advantage”: Or, Kickstarter Is A 300-Year-Old Scam

by evanmcmurry

Quoted in David Graeber’s Debt, in a segment on the burst of joint-stock offerings that occurred in England at the advent of capitalism:

The most absurd and preposterous of all, and which shewed, more completely than any other, the utter madness of people, was one started by an unknown adventurer, entitled “A company for the carrying on of an undertaking of great advantage, but nobody to know what it is.”

The man of genius who essayed this bold and successful inroad upon public credulity merely stated in his prospectus that the required capital was half a million, in five thousand shares of 100l. each, deposit 2l. per share. Each subscriber, paying his deposit, would be entitled to 100l. per annum per share. How this immense profit was to be obtained, he would not condescend to inform them at that time, but promised that in a month the full particulars would be duly announced, and call made for the remaining 98l. of the subscription. Next morning, at nine o’clock, this great man opened an office in Cornhill. Crowds beset his door, and when he shit up at three o’clock, he found that no less than one thousand shares had been subscribed for, and the deposits paid.

He was philosopher enough to be contented with his venture, and set off that same evening for the Continent. He was never heard of again.

Sound familiar?

In one of the most notorious failures yet, Josh Dibb of the band Animal Collective collected more than $25,000 from Kickstarter donors in December 2009 to travel to Mali and work on an anti-slavery movement. Almost three years later, the hundreds of donors to Dibb’s project have yet to receive any of the rewards they were promised. On August 21, Dan Rollman, a man who had supported the Malian endeavor, took to the project’s comments section to complain. “We are now approaching three years since your project was funded. Three years!” Rollman wrote. “You relied on the belief of strangers, who gave you over $25,000 so you could have a fun adventure in Africa. It’s truly disappointing.”