The Real Movement

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Tag: Paul Krugman

Paul Krugman: “Oh no! I said too much.”

Help me here: Did Paul Krugman just call for the end to wage labor?

I am not sure how to take Krugman saying, essentially, post-war fascist state economic policy is dead. Krugman’s stated reason for deserting from the side of fascist state “expansionary” policies to the side of regulations and taxes designed to limit the risk of crisis is that “the political economy of policy turns out to make an effective fiscal response to depression very difficult.” Which is to say, Krugman thought the fascist state was interested in maximizing output and employment in the face of a “shock to demand”, when it is actually only interested in maximizing the production of surplus value.

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The Left’s myopic defense of the Keynesian social state

The root of the Keynesian social state is the starvation of the working class

I think the post-war Left has never been able to properly understand Keynesian economics because it has never grasped capital itself. This problem has deep roots in labor theory back to Marx’s piece, “Reflections on Money”, where he criticizes a one-sided view of capital. He pointed out that capitalism is not just the exchange between consumers and capitals, but also between capitals themselves and the relation between the two. Another way to put this, I think, is that capital is not just the circulation of commodities, but capital in the form of commodities.

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Marx proven wrong by Progressives and Liberals once again

1. How to create 2014 talking points in four easy to follow steps

File this under, “Marx Proven Wrong By Progressives and Liberals Once Again”.

The question this time is the relation between industrial capital and finance capital. According to DSWright (whoever the fuck she/he is) Michael Hudson, a heterodox economist,

“has long claimed that Marx’s contention that ultimately industrial capitalism would triumph over finance capitalism was wrong.”

In fact, according to DSWright, bankers now dominate the economy and subject productive employment to the “rent-seeking” priorities of finance capital. Says Hudson, in 1998,

“Whereas the old industrial capitalism sought profits, the new finance capitalism seeks capital gains mainly in the form of higher land prices and prices for other rent-yielding assets.”

hudsonIndustrial capital, in other words, only engages in healthy, wholesome profit-making, while finance capital seeks debt slavery and constantly rising physical and financial asset prices.

DSWright is happy to report Hudson’s correction of Marx has now been adopted into the arguments both of Joseph Stiglitz and of Paul Krugman. According to Stiglitz much of what goes on in the financial sector is unhealthy, vile rent seeking, not healthy, wholesome profit-making. Paul Krugman has recently declared America in the 21st century is now seeing “the growing importance of monopoly rents: profits that don’t represent returns on investment”. Krugman argues these monopoly rentiers with their market dominance actually may be prolonging the depression. The unprecedented duration of this depression is, “no puzzle here if rising profits reflect rents, not returns on investment.”

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