[Marxism] Inducing the Madness of Crowds

Jim Farmelant farmelantj at juno.com
Fri Jul 9 06:57:25 MDT 2010


 
On Thu, 08 Jul 2010 21:47:14 -0700 michael perelman
<michael at ecst.csuchico.edu> writes:

> 
> After losing a fortune speculating in the South Sea Bubble, Isaac 
> Newton 
> reportedly said that he could calculate the motions of heavenly 
> bodies, 
> but not those of the madness of crowds.
> Today, millionaires and billionaires are pretty much united in the 
> proposition that even kind of social provision must wither in order 
> that 
> the state can afford to clean up the mess that the wealthy have 
> created. 
>   In addition, raising their taxes is not only unfair, but 
> destructive 
> of health of the economy.  Yves Smith's opinion piece in the Times, 
> 
>> 
> More at
> 
>
http://michaelperelman.wordpress.com/2010/07/09/inducing-the-madness-of-c
rowds/

The Polish Marxist economist Michal Kalecki in his 1943 article, 
"Political Aspects of Full Employment," 
(http://mrzine.monthlyreview.org/2010/kalecki220510.html) long ago made
the point that 
rentiers and capitalists would tend to be resistant to the use of
Keynesian-style 
fiscal and monetary stimulus policies to reduce unemployment.  In the
case 
of the rentiers, such opposition would stem from the fact that the
resulting 
dropping of interest rates from such policies would directly reduce their
incomes.  
In the case of capitalists, the reasons were a bit more complex.  Very
often 
such policies, in Kalecki's view, would boost business profits, but they 
would also also make the working class more truculent, since they would 
now become less fearful of becoming unemployed.  Kalecki believed 
that generally speaking capitalists were more fearful of the loss of
political 
power and social status to the working class than they were of the loss
of 
profits. Given the fact that since the 1970s, we have seen a radical
reassertion 
of the power of rentiers, and given the loss of power of trade unions and
industrial 
capital, the fact that most governments in the industrial nations have
been 
responding to the current economic crisis with austerity policies should
come as no surprise.

Jim Farmelant
http://independent.academia.edu/JimFarmelant

> 
> -- 
> Michael Perelman
> Economics Department
> California State University
> Chico, CA
> 95929
> 
> 530 898 5321
> fax 530 898 5901
> http://michaelperelman.wordpress.com
> 
> 
 
 
 

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