Keynesianism in the Great Recession

by Henry Farrell on March 9, 2012

Since it’s starting to “filter”:http://krugman.blogs.nytimes.com/2012/03/05/economics-in-the-crisis/?pagewanted=all into “debate”:http://modeledbehavior.com/2012/03/06/in-which-i-am-won-over-by-paul-krugman/, it’s probably time that the paper that John Quiggin and I have written on Keynesianism in the Great Recession be released into the wild. It’s currently under journal review, but still has some holes (we figured it was at the stage where it would be helpful to have reviewers point out what we needed to do rather than try to model their likely responses internally). So, it’s here for downloading – and criticisms, comments and suggestions for improvements will be gratefully received. NB that both John and I have participated in this debate – but we have tried, as best as we can, to look at what happened not from the perspective of whether the people who were winning at any one point in time _deserved_ to win or not according to our subjective criteria, but instead, whether there are general explanations (independent of the quality of the arguments on the one side or the other) for the influence of different arguments at different times. In short, we’ve tried to write a paper about what happened, and why, rather than what should have happened. NB also, that we are aware of some holes (e.g. the fit between some of the theory, and the practical application is not as tight as we would like), and would love to hear suggestions for improvements.

Update: It would be particularly interesting to hear from people with strong, divergent perspectives, so as to make sure that the piece reflects as much information and as many points of view as possible. People should also feel free to email me at keynespaper@henryfarrell.net if they would prefer to make criticisms or suggestions privately rather than in public.

Debt, hierarchy, and the modern university

by Chris Bertram on March 9, 2012

David Graeber’s three social principles – hierarchy, exchange and communism – are useful devices to think about the world, particularly when you become sensitized to the way in which one can turn into or mask another. One site of human interaction that may be illuminated by Graeber’s principles is the modern university: perhaps especially the British version which has evolved from nominally democratic modes of governance to extremely hierarchical ones within a generation.
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Will Wilkinson makes what seem to me very astute comments about the Cato Institute’s partisan profile. The occasion is the ongoing Koch-Crane conflict. But these comments are important more for the way they point up typical deflections that occur when the light of ‘ideal’ theory is refracted through the lens of partisan desire, playing tricks on our view of the landscape of actual politics.

It’s tempting to think that Cato almost never does anything to help the Democrats largely because it’s just too far to the left of the Democratic Party on foreign policy and civil liberties. Yet Cato is equally far to the “right” of the Republican Party on economic policy, welfare policy, education policy, and lots more. Social Security privatization is a forced savings program. School vouchers and/or education tax credits are taxpayer-funded education. Lower income-tax rates concede the income tax. Again and again Cato finds a way to settle on non-ideal, “second-best” economic, welfare, and education policies, and argue for them in away that provides “ammo” to the right. But it very rarely develops compromising second-best policies on foreign policy or civil liberties that would be of any practical use to dovish or civil-libertarian Democrats. Why not? Why was coming out in favor of gay marriage more controversial at Cato (the state shouldn’t be involved in marriage at all!) than coming out in favor of school vouchers (the state shouldn’t be involved in education at all!)? Why not a bigger institutional push for medical marijuana as a second-best, nose-under-the-tent alternative to outright legalization? The fact is that Cato has so deeply internalized the ethos of the venerable right-fusionist alliance that there is almost no hope of it functioning on the whole in a truly non-partisan way. I think its status-quo reputation reflects that.

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