A New Macroeconomics?(jwmason.org)
jwmason.org
A New Macroeconomics?
http://jwmason.org/slackwire/a-new-macroeconomics/
12 comments
> I think that there are not enough jobs at the moment for the western people. So we create them, and handout "fake" rewards for them.
What nonsense is this? The purpose of work is to generate material wealth, so that the population and civilization can survive at a high standard of living, without the system collapsing.
> Since we haven't yet found a stable social solution for people not working and having purpose
The historical solution advocated by earlier U.S. politicians and economists was to maximize long-run wages by investing in agricultural productivity that had the potential to raise the net-product at the margin of cultivation, then to eliminate land speculation to bring the margin of cultivation to cities, then to give the unemployed free land.
What nonsense is this? The purpose of work is to generate material wealth, so that the population and civilization can survive at a high standard of living, without the system collapsing.
> Since we haven't yet found a stable social solution for people not working and having purpose
The historical solution advocated by earlier U.S. politicians and economists was to maximize long-run wages by investing in agricultural productivity that had the potential to raise the net-product at the margin of cultivation, then to eliminate land speculation to bring the margin of cultivation to cities, then to give the unemployed free land.
> What nonsense is this? The purpose of work is to generate material wealth, so that the population and civilization can survive at a high standard of living, without the system collapsing.
The purpose ought to be that, but surely a cursory glance at the world around us showed we have strayed, trapping ourselves in a rat race rather than relaxing with the abundance we've already achieved.
A great example of this is https://johnjayeconomics.org/prison-labor-in-u-s-state-priso... . Prison labor has delayed per-capita, and is often a reward (feeling of purpose vs terrible boredom). That might sound absurd, but I'd say it is just a microcosm of the world outside bars.
> > Since we haven't yet found a stable social solution for people not working and having purpose
I hope this is a bit tongue in cheak. First let's stop artificially starving and humiliating people who don't have work. Then I bet they will do well finding themselves purpose.
> The historical solution advocated by earlier U.S. politicians and economists was to maximize long-run wages by investing in agricultural productivity that had the potential to raise the net-product at the margin of cultivation, then to eliminate land speculation to bring the margin of cultivation to cities, then to give the unemployed free land.
Not quite sure what you are referring too, but yes, we should ratchet down labor hours with increasing productivity rather than increasing (rarely fulfilling, environmentally degrading) consumption.
The purpose ought to be that, but surely a cursory glance at the world around us showed we have strayed, trapping ourselves in a rat race rather than relaxing with the abundance we've already achieved.
A great example of this is https://johnjayeconomics.org/prison-labor-in-u-s-state-priso... . Prison labor has delayed per-capita, and is often a reward (feeling of purpose vs terrible boredom). That might sound absurd, but I'd say it is just a microcosm of the world outside bars.
> > Since we haven't yet found a stable social solution for people not working and having purpose
I hope this is a bit tongue in cheak. First let's stop artificially starving and humiliating people who don't have work. Then I bet they will do well finding themselves purpose.
> The historical solution advocated by earlier U.S. politicians and economists was to maximize long-run wages by investing in agricultural productivity that had the potential to raise the net-product at the margin of cultivation, then to eliminate land speculation to bring the margin of cultivation to cities, then to give the unemployed free land.
Not quite sure what you are referring too, but yes, we should ratchet down labor hours with increasing productivity rather than increasing (rarely fulfilling, environmentally degrading) consumption.
I would think the issue is we have to start with what are we solving for exactly?
Max GDP for the country in question?
Max GDP contribution to global GDP for the country in question?
Max global GDP?
Maximize some individual distribution for the country population in question?
Maximize some individual distribution for the global population?
I don't think we can even answer that so it is doomed from the start if we are trying to be objective.
If we start over we should just explicitly admit this field is a type of theater. Like Shiller's Narrative Economics is a good start but that is still pretending to be too scientific.
Max GDP for the country in question?
Max GDP contribution to global GDP for the country in question?
Max global GDP?
Maximize some individual distribution for the country population in question?
Maximize some individual distribution for the global population?
I don't think we can even answer that so it is doomed from the start if we are trying to be objective.
If we start over we should just explicitly admit this field is a type of theater. Like Shiller's Narrative Economics is a good start but that is still pretending to be too scientific.
> I would think the issue is we have to start with what are we solving for exactly?
In order to avoid a civilization collapse we need to maximize net-product, the material surplus which society produces after deducting the cost of maintaining the workers and the material capital or tools which they are using to generate that surplus. This was the big idea of the enlightenment era and was analyzed by the physiocratic school of economics with regards to food production.
Then in order to maintain political stability we need to maximize the share of the social surplus paid to labor and maximize potential wages, which in the long-run according to ricardian economics is equal to the net-product which can be generated on the worst land in use or best land left in common.
In order to raise the margin of cultivation as high as possible we need to minimize land speculation. This is accomplished by replacing any regressive taxes which suppress the net-product at the margin of cultivation with the georgist land value tax.
> Max GDP for the country in question?
No, gross product is not net product. Each political jurisdiction needs to maximize local net product at margin of cultivation.
> Max GDP contribution to global GDP ... Max global GDP?
No, we need to focus on net product.
> I don't think we can even answer that so it is doomed from the start if we are trying to be objective.
Several schools of economics have already answered this, those schools of economics are just no longer taught.
> If we start over we should just explicitly admit this field is a type of theater
No, if energy return on energy invested of a political system falls below zero and becomes negative for majority you can get a civilization collapse.
In order to avoid a civilization collapse we need to maximize net-product, the material surplus which society produces after deducting the cost of maintaining the workers and the material capital or tools which they are using to generate that surplus. This was the big idea of the enlightenment era and was analyzed by the physiocratic school of economics with regards to food production.
Then in order to maintain political stability we need to maximize the share of the social surplus paid to labor and maximize potential wages, which in the long-run according to ricardian economics is equal to the net-product which can be generated on the worst land in use or best land left in common.
In order to raise the margin of cultivation as high as possible we need to minimize land speculation. This is accomplished by replacing any regressive taxes which suppress the net-product at the margin of cultivation with the georgist land value tax.
> Max GDP for the country in question?
No, gross product is not net product. Each political jurisdiction needs to maximize local net product at margin of cultivation.
> Max GDP contribution to global GDP ... Max global GDP?
No, we need to focus on net product.
> I don't think we can even answer that so it is doomed from the start if we are trying to be objective.
Several schools of economics have already answered this, those schools of economics are just no longer taught.
> If we start over we should just explicitly admit this field is a type of theater
No, if energy return on energy invested of a political system falls below zero and becomes negative for majority you can get a civilization collapse.
I think he does a great job explaining why this isn't the right angle to approach this from.
There is no one "we" and "we" aren't aiming for any one goal in particular.
Aside from holding guns to people's heads, you can't force every policy maker to simultaneously try to maximize only gdp and nothing else. They have other goals and other constraints.
Nothing iq being solved for in the aggregate. There are different situations where different things need to be solved for
There is no one "we" and "we" aren't aiming for any one goal in particular.
Aside from holding guns to people's heads, you can't force every policy maker to simultaneously try to maximize only gdp and nothing else. They have other goals and other constraints.
Nothing iq being solved for in the aggregate. There are different situations where different things need to be solved for
Classically political economy was the study of the accumulation and distribution of material wealth. The first part of this study involves figuring out how society produces a social surplus or net-product above cost of maintaining labor and productive capital generating that product so that the workers don't starve and all the industries don't get mothballed. The second part involves figuring out who the social surplus or net product actually gets paid to in a financialized market economy as a result of leverage and various state policies particularly concerning land and money.
The classical normative political agenda then usually then revolves around figuring out how to maximize wages for the least advantaged members of society which don't own property. It is thought that doing so will increase the productive energy which the largest fraction of the base of society will be willing to volunteer towards maintaining and replicating the political system, without the need for a top-heavy political system, in a manner resembling a pyramid, but ideally where people are merely ruled by a common set of ideas with regards how to best achieve such a system without the need for an absolute ruler or king.
The classical normative political agenda then usually then revolves around figuring out how to maximize wages for the least advantaged members of society which don't own property. It is thought that doing so will increase the productive energy which the largest fraction of the base of society will be willing to volunteer towards maintaining and replicating the political system, without the need for a top-heavy political system, in a manner resembling a pyramid, but ideally where people are merely ruled by a common set of ideas with regards how to best achieve such a system without the need for an absolute ruler or king.
On one hand there’s cryptocurrency and the resurgence of Austrian economics. On the other hand, MMT.
Mainstream macroeconomics is a zombie. Posts like this, which don’t even address the situation head on, give even more evidence of this dismal fact.
Mainstream macroeconomics is a zombie. Posts like this, which don’t even address the situation head on, give even more evidence of this dismal fact.
What is not being addressed? MMT is one facet of the general Post-Keynesian tradition the author is part of.
> there is no point of contact between the world of these models and the real economies that we live in
In other words, macro economics predictive power in the real world : zero.
In other words, macro economics predictive power in the real world : zero.
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Going into a more polar and personal view, I think that there are not enough jobs at the moment for the western people. So we create them, and handout "fake" rewards for them. Why? Because work has a social utility to provide purpose for individuals. Since we haven't yet found a stable social solution for people not working and having purpose, we are living in a limbo which we might never exit. It also appears from afar, that the is a void to fill in most institutions and that smart people are not being incentivized to fill them