My problem with Keynsians

[RGacky3]

Although being much more intelligent and understanding than neo-classical economists, they have a couple flaws.

Keynsians almost always accept and take into account Marx's contradictions of capital accumulation, but their solution, is not to change the structure that creates those contradictions, its instead to have an outside institution (a government, a central bank) try and counter these contradictions and to protect the system from collapse.

What they are missing out however is the nature of these institutions, capitalist governments are generally capitalist institutions and very very succeptable to capitalist pressure, or the central bank, which is essencially controlled by the financial institutions, and these capitalits have no interest in fixing or countering these internal contradictions because it is exactly these contradictions that maximize profits for the individual firms (until these contradictions collapse the economy).

Keynsians also largely ignore class analysis, which looks at the micro level of commodity production which form the basis for the entire problems of the capitalist systems, so in a way they are addressing the other problems but not the base of the problems. Keynsians take forgranted that no matter what counter weights they use to capitalism, that class antagonism is still going to happen and is still oging to exhasberate the internal contradictions of capitalism.

Neo-Classicals are simply blind dogmatic worshipers of capitalism, Keynsians understand the problems, but they are hell bent on defending the system no matter what, and that means defending the internal contradicions and defending the class structure, unless you adress the root of the problem, your never gonna fix the system.

Now Keynsian insights into Capitalism are very very important, just as Classical, and even some neo-classical insignts are important, but its flawed in that it thinks you can just balance out a fundementally flawed system.

[Makaru]

I agree with you. Unfortunately I recognized these imperfections with Keynesian economics (Obama's policies have largely failed to do any good and they have been Keynesian in their approach) and like a big idiot I indulged myself in the Libertarian fantasy, thinking that if we could just bust the big corporations and have capitalism on a smaller scale with smaller businesses, everything would work itself out. Of course, capitalism doesn't work that way when left to its own devices.

I think what Keynesians fail to recognize is that all they're doing is 1) reinforcing the legitimacy of the capitalist economy and 2) I'll let Rosa Luxemburg do the talking here, even though she wasn't exactly talking about the same thing:

'What functions today as “social control” – labour legislation, the control of industrial organisations through share holding, etc. – has absolutely nothing to do with his “supreme ownership.” Far from being, as Schmidt believes, a reduction of capitalist ownership, his “social control,” is, on the contrary, a protection of such ownership. Or, expressed from the economic viewpoint, it is not a threat to capitalist exploitation, but simply the regulation of exploitation. When Bernstein asks if there is more or less of socialism in a labour protective law, we can assure him that, in the best of labour protective laws, there is no more “socialism” than in a municipal ordinance regulating the cleaning of streets or the lighting of street lamps.' (Reform or Revolution, ch. 3)

Emphasis mine. I think that Keynesianism amounts to regulation of capitalist exploitation while simultaneously refusing to admit that there is a better alternative than regulating capitalist exploitation.

[RGacky3]

(Obama's policies have largely failed to do any good and they have been Keynesian in their approach)

Actually Obama's policies have been far from Keynsian, he is FAR to the right of soft-keynsians like paul krugman or peter stiglitz (and yes they are soft keynsians).

But I agree with your other points, Keynsianism has great analysis, but its solutions are ultimately like giving pain killers to a cancer patient (whereas the libertarian solution is giving ciggaretes and tanning bed treatments to the cancer patients).

[eric922]

Actually Obama's policies have been far from Keynsian, he is FAR to the right of soft-keynsians like paul krugman or peter stiglitz (and yes they are soft keynsians).

But I agree with your other points, Keynsianism has great analysis, but its solutions are ultimately like giving pain killers to a cancer patient (whereas the libertarian solution is giving ciggaretes and tanning bed treatments to the cancer patients).
Just curious could you give any examples of hard Keynesianism? Would the New Deal have been an example of it?

[tradeunionsupporter]

I agree about Keynsians.

[Ism]

Any historical example of remarkable increases or decreases changes in the structural* national budget (in a remarkable degree) with the intention of stimulating the economy can be classified as examples of Keynesianism. So yes, New Deal is an example of Keynesianism because the government spent money, thus lowering the structural budget with the intention of increasing the economic growth.

*=The structural budget is what the national budget "actually" is. In other words, it is the budget that has been "cleansed" of the effects of business cycles whereas a boom increases the balance and a bust decreases it.

Sadly, I don't know if those words I've used are correct because I am simply not familiar with the English terminology. But I hope you understand.

[RichardAWilson]

All of which is theoretical. Even Keynesian Budgeting can contribute to structural fiscal imbalances, assuming the new expenditures and tax-cutting are yielding a low multiplier (I.e. Defense Spending and Imperialism). However, should those expenditures and tax-cuttings yield a high multiplier (I.e. Building the Interstate Highway System and offering incentives for new business spending), it's believed they will have a positive affect on the nation's fiscal health.

[RGacky3]

Just curious could you give any examples of hard Keynesianism? Would the New Deal have been an example of it?

I would argue that the stockholm school is hard keynesianism, Hyman Minsky probably, and so on.

I'd say the hard examples of Keynesianism were the social-democracies in Northern Europe, the pre-thatcher British Labor party.