A Post-Keynesian Microeconomic Approach to Welfare

[Die Neue Zeit]

For those interested in truly "demanding the impossible" and in structural, radical, pro-labour reform, instead of some "no demands" mantra or "transitional" sloganeering, this PowerPoint presentation is an easy read on the fundamentals of Radical Post-Keynesianism:

http://faculty.buffalostate.edu/joth/sitemac/Research_files/Jo.afit.presentation.pdf


General difficulties in welfare economics
- Evaluation of the status quo and system of policy
- Political power of the ruling class: "buy privileged access to the state" (Levine)

[...]

Radical Post-Keynesianism
- Inherently unstable system and systemic stagnation
- The primary concern of the modern democratic state is to protect existing social order, property rights, and the vested interests of the ruling class, not the interests of the public.
- The transformation of the organizational structure of capitalist economy

[...]

The capitalist state as a "benevolent purveyor of cradle-to-the grave security." (Hill)

PK: Main concern is the management of aggregate demand -> employment -> welfare, individual liberty, and social justice

The capitalist state is not willing to achieve full employment, since it is not consistent with the interests of the capitalist class. (Kalecki, Eichner)

Economic policy is the function of power relation, ideology, and political preference of the state. (Eichner, Samuels)

Little reason to believe that democratic-capitalist state would serve the general public.

[...]

PK macro approach alone is not sufficient to deal with welfare: the structure of industry, power of business enterprise, dividends and retained earning, and collective efforts (e.g., trade associations and trade unions)

[...]

The principle of effective demand and welfare
- Fundamentalist Keynesians: public jobs, progressive income tax, reducing interests on capital assets, socialization of investment (Keynes, Minsky, Wray)
- Kaleckians: Control of monopoly power and monetary resources (Kalecki, Eichner)
- Sraffians: Provision of social wage goods, raising real wage and reducing profits (Eatwell and Milgate, Cesaratto)

Implications
- Unstable system and vulnerable life
- The standard of living of the working class may be improved in the process of accumulation through the state actions enhancing effective demand.
- Welfare can be understood in the context of monetary production economy, surplus producing economy, and circular production economy.

[...]

Welfare of the ruled class households is conditioned by
- the private business enterprises' willingness to expand the productive capacity
- the state's willingness to redistribute incomes between the classes
- the state's willingness to spend its tax money on surplus goods
- the state's willingness to provide public goods at lower prices

Implications:
- What is good for the business enterprise is not necessarily good for the public.
- What the state does is not necessarily good for the public; the state welfare programs are consistent with business principles (i.e., market stabilization).

[the Left™]

DNZ always struck me as the intellectual powerhouse of this forum

[Revolutionair]

I :wub: DNZ.

Also this might be the first time I remotely understand what he is talking about.

[MarxSchmarx]

Interesting, but what do you see as the difference between this and, well, just plain old reformism? After all, it seems to have as an implicit goal a built-in stabilizing mechanism at least on the economic side of things that presumably sociopolitical change and allows the basic fundamentals of capitalism to continue.

[Die Neue Zeit]

Programmatically, comrade, the distinct Post-Keynesian reforms range from immediate to threshold demands, something which can't be said of any of the vulgar policies within the mainstream Bastard Keynesian framework.

They enable the basic principles of genuine-class-struggle-as-political, of social labour, and of transnational emancipation to be "kept consciously in view" (Kautsky). I don't know why the PowerPoint author listed the Sraffians/neo-Ricardians as Post-Keynesians, though.

Those policies not on the threshold also tend to "make further progress more likely and facilitate other progressive changes as well" (Hahnel), or, in my paraphrase, facilitates the issuance of either intermediate or threshold demands.

That being said, they should expand their public policy and sometimes tweak their analysis. My commentary on Fully Socialized Labour Markets (http://www.revleft.com/vb/supply-side-political-t152098/index.html) and discussions on this policy with them illustrates their public policy development at being at a snail's pace, and also past inconsiderations of Supply-Side Economics with respect to the supply of labour (as opposed to capital).

[And who knows what the Post-Keynesian opinions are, if any, on indicative planning (http://www.revleft.com/vb/behavioural-political-economy-t161630/index.html)?]

[RED DAVE]

structural, radical, pro-labour reformIf this is what you are advocating as the goal of working class struggle, could you explain it a little more clearly?

RED DAVE

[Die Neue Zeit]

^^^ I already quoted the pareconist Hahnel and of course Kautsky above. :confused:

[RED DAVE]

structural, radical, pro-labour reform
If this is what you are advocating as the goal of working class struggle, could you explain it a little more clearly?
I already quoted the pareconist Hahnel and of course Kautsky above.That's hardly clear. Would you do us the favor of explaining or delineating in your own words.

RED DAVE

[Jose Gracchus]

Where are the worker-friendly bureaucrats going to come from to staff all this fine-tuning, capital-tinkering bullshit? This is the kind of thing that would have to be propagandized to erstwhile state-coordinators for decades, like.' "government should be run like a business" by the far-right "libertarian" movement. It is not something that could be credibly raised, not the least bit because it is a 'program' invented by a single dude probably in some old lady's basement

[Die Neue Zeit]

The only other alternative to this very political approach, short of "general strike" and "revolution now," is the dead end of coupling socialist propaganda with direct workplace struggles or some other isolated economic struggle (like anarcho-syndicalist strategy). No political approach "this side of revolution" can avoid having the State as part of your public policy-making audience, like issuing demands and struggling for them from a grassroots perspective.

That PDF author may be a student, but that doesn't detract from his points.

[Die Neue Zeit]

This crisis is a time to demand the impossible (http://www.morningstaronline.co.uk/news/content/view/full/111855)



By George Galloway

Shakespeare would have had little difficulty in relating the drama unfolding on the European and global stage.

The troupe of players from the political class have their "entrances and exits" until they reach this latest scene - a "second childishness and mere oblivion; Sans teeth, sans eyes, sans taste, sans everything."

Toothless, wilfully blind, gaudy and impotent sums up the Cannes summit meeting of the richest 20 countries last week and the ongoing response of political leaders to the crisis engulfing the eurozone and the wider global economy.

Behind the talking heads and cliched headlines lies a barely spoken truth - the whole model of managing global capitalism of the last three decades is breaking down as the financial crisis unleashed with the collapse of Lehman Brothers three years ago morphs and mutates from one geographical or economic area to another. There is no end in sight.

In the case of Europe, it is a 60-year project of co-operation among the elites at the expense of the mass of people that is coming unstuck.

Through the fraying seams are poking the heads of monsters from the last century which we were told were safely shrouded and buried.

For while toothless when it comes to halting the crisis itself, the business elites and their acolytes across the Establishment political spectrum have their claws out and sharpened, slashing into every gain working people have made since the hungry '30s.

Half of young people in Spain are unemployed. In Britain, it's already a record at one million and set to rise much further, not least as the decades-long expansion of university education goes into reverse.

Every aspect of life in Greece is already being lopped and squeezed. The predictable result, according to the prestigious medical journal the Lancet, is that people are dying, more of them and earlier.

The bailout of Greece is anything but. It is like a payday loan of the type that more and more people in Britain are being forced into.

Witness the proliferation of loan-shark outfits popping up in abandoned shops on run-down high streets across the country. No sooner is the money received at exorbitant interest rates than it is handed straight to corporate creditors and banks.

According to the plan for Greece - the plan, remember - the debt-burden is to rise to twice economic output as the austerity measures sink the country into deeper slump.

In 10 years it's supposed to fall back to 120 per cent. That's the level now in Italy, which has just plunged into the eye of the storm.

No wonder no-one really believes the austerity plan will work, even in its own terms.

But still, like some demented general in the bloodbath of the first world war, they press on, hurling men, women, children and the social fabric over the top to be shredded by murderous machine-gun fire.

Perhaps in years to come they'll concoct an equivalent of the poppy to mark another fallen generation. The hypocrites and hirelings can wear it ever larger - maybe chrysanthemums would suit them.

And with the pain inflicted on the millions by the millionaires, come all the old elitism, scapegoating and chauvinism.

Instead of German soldiers bayoneting Belgian nuns, we have the despicable lie that the common people of southern Europe are feckless scroungers who have brought this all on themselves.

Murdoch may be on the ropes, but Channel 4 stepped in, like a tag-team partner, to beat up on the suffering people of Greece this week.

"Greek for a Week" could have bubbled up straight from the Wapping sewer.

Its premise, never questioned, was that the average Greek is lazy, coddled by generous state provision and expecting handouts from the rest of us. Another devious Johnny-foreigner.

In truth, Greeks are at the top of the league table for working hours in Europe and at the bottom when it comes to pay.

The people protected by the state are the oligarchs, the shipping magnates, media barons and associated bankers. Just like here really.

If anyone you know is tempted by this xenophobic drivel, remind them that welfare dependency and pampered public servants are exactly the insults hurled by the government and its friends here in Britain at disabled people, the unemployed, and the nurses, hospital porters, school caretakers and staff who are set to strike later this month against a pensions robbery greater than anything even contemplated by the unlamented Robert Maxwell of 20 years ago.

There are other similarities too which any opposition worthy of the name would be skewering David Cameron on every day.

The Greek oligarchs - the 1 per cent who lord it over us - are not the wealth creators.

They are sucking up everything they can and investing just 7 per cent of output back into the economy.

The rest is being shipped and splashed out in the property market of London's Chelsea and the financial speculation which inflated this crisis in the first place.

That's exactly what the bankers and captains of industry are doing in this country.

Investment in making real things, in infrastructure and in vital services, has plummeted.

Instead, we have more speculation and indulgence on everything from fine wine and property to currencies and lumps of precious metal - as the Christmas bonus bonanza in the City is about to show.

None of the right or centre-left parties, which have in effect converged in a fictitious consensus, are prepared so far to raise the prospect of using the power of government, which after all the bankers all lauded when it came to bailing them out, to force this investment, and therefore economic growth, to take place.

They are not prepared to impinge on the wealth monopoly of big business to invest in the interests of all.

On the contrary, to preserve the system that is failing, they are prepared to restrict the democratic rights of all in the interests of the 1 per cent.

At the time of writing we no longer have an elected prime minister in Greece.

We have a former central banker who has never been elected to anything.

Soon, it seems, we may have a former European Union commissioner as prime minister of Italy.

The Italian president has just appointed Mario Monti a life senator (like a British lord) so he can qualify for the position.

Nero, Caligula and a earlier phase of Roman history spring to mind.

What qualification do these "technocrats" have? They are architects of the order that is collapsing, priests of the god that failed.

They are wedded to the austerity economics and, in the eyes of the IMF/European Central Bank/European Union elite, they are as Thatcher used to say, people like us.

Of course they have no democratic mandate at all. And that's another bonus.

They are not electorally responsive to the people, though the parties that they choose their minister from are.

For the very last thing that the 1 percenters want is for the 99 per cent to have a say over the policies that are ruining the lives of most of them.

That's why outgoing social democrat prime minister George Papandreou came under excoriating pressure for mooting the idea of a referendum on the austerity measures.

He buckled. If ever there was an example of dotage as a second childishness, but without everything, it is the leader of Pasok, a shadow of his father Andreas, who founded the party.

Or as Karl Marx and Frederick Engels observed, all historical personages appear twice, first as tragic giants, second as farcical dwarves - first as the father, then as the son.

The suspension of democratic norms we have become accustomed to should ring alarm bells.

It is social resistance, or the fear of it, that created the political logjam in Greece and Italy.

In that situation, the high priests of globalised capitalism have chosen the most undemocratic of a range of options.

They and others will do so again, unless that resistance can alter the calculus.

They can get away with these manoeuvres, if only temporarily, in part due to the paucity and pusillanimity of traditional social democratic/Labour parties, which have spurned the idea of a big, comprehensive alternative to capitalism red in tooth and claw.

How else can we explain how in Spain next weekend, the sons of Franco in the Tory People's Party are likely to win an election against the outgoing social democrats?

I don't believe it's because the people in Spain want more of the failing capitalist policies.

Many may not see an alternative, but how can they if one is not credibly presented and argued for by those they have historically looked to?

I believe that people are crying out for a big idea, a real one, not bunkum like Cameron's "big society."

That's why the sympathy for the Occupy movement, which goes way beyond the numbers taking part so far, is so great.

It is a sign of people grappling for themselves for a truly democratic and progressive alternative.

And the lack of a radical alternative equal to the scale of the crisis infects everything that Labour says and does.

Just one example - BBC's Question Time this week. On issue after issue Labour's Rachel Reeves failed even to make contact with the ball, let alone put it in the net against a panel that while absurdly right-wing in its composition was hardly fleet of foot, viz the flabby Stephen Pollard at right back.

Forget radicalism, she couldn't even come up with basic social democratic arguments about how private health care is parasitic on the NHS, cherry-picking profitable medical procedures while refusing insurance to the kind of former industrial workers who were doubtless in the Newcastle audience.

The apparent certainties of the age ushered in by Reagan and Thatcher are melting into air.

The left, if we want to have any solidity, has no option but to voice the big alternative and bend every effort to organising around it.

We have resources to draw on. And we have traditions.

As I write, news is breaking of a massive battle at the University of Berkeley in California between occupying students and riot police.

It is a resounding echo of the 1960s movements that were the well-spring of so much that is progressive.

A historical event appearing twice - but this time with all the vigour of its infancy.

It's time again to be realistic and to demand what they tell us is impossible.