Keynes was wrong | 57 comments (57 topical, 0 editorial, 0 hidden)

Re: Keynes was wrong (none / 1)

Times of Abundance might be a factor of importance after all. By definition, scarcity means that there is not enough for everyone - with whatever money. The turn away from Keynesian economics started in the 1970-80s, soon after the "Club of Rome" report. Self-conscious elites might be thinking along the lines of my earlier comment today, adjusted:

Is there a point to enlighten everyone? Confused population is a part of the political-economic game...

by das monde on Sat May 31st, 2014 at 08:36:52 AM EST

Re: Keynes was wrong (none / 0)

I think Keynesianism will be the way we take once the neolib economy has finally crashed and burned enough times no-one will give it even a minimum level of credence.

Still far way, iow. Still far too many suckers to milk for that!

The weak link will always be the grifters who can corrupt anything...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sat May 31st, 2014 at 09:51:41 AM EST
[ Parent ]

Re: Keynes was wrong (none / 1)

...once the neolib economy has finally crashed and burned enough times...

...there may not be enough left to enable us to start over in a meaningful way - possibly not until current population levels have been divided by ten or more. In another forty years fossil fuels will be vary scarce and a large portion of the world's population will be, perforce, using what ever sustainable energy they can manage. If we have not built enough renewable energy sources such as wind, solar, tidal and geothermal a lot of the world will look like current day Romania or Bulgaria, except with less liveable cities and an overall lower level of complexity. Universal health care and education beyond elementary and middle school will be a thing of the past - only a few will have access to such things.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jun 1st, 2014 at 09:07:53 AM EST
[ Parent ]

Re: Keynes was wrong (4.00 / 2)

.. The only use for which oil is really direly necessary for civilization is lubricants, and biological sources will cover that.

I see this vision of the future a lot, and it is not possible. Because given this alternative lots of things which we would not currently do becomes very palatable.

Such as cheap-skating reactor construction. There is no natural law keeping anyone from ripping out the furnace of a coal plant, sticking in a fission heat source and turning it back on.

Nor is it required by physical reality that one has to hold a decade of hearings before running a railline. And so on and so forth.

by Thomas on Sun Jun 1st, 2014 at 09:20:04 AM EST
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Re: Keynes was wrong (none / 1)

Thirty years ago I suggested to my physicist brother-in-law that the long term solution to reactor by-products was to launch them onto a trajectory that would take them into the sun. "That should do it." was his response. The problem then was how to get them safely off the Earth's surface and onto that trajectory. I think it is within our technical capability today to design and build a rail gun that could fire a vitrified projectile onto such a trajectory. Such a system could also serve to cheaply send materials either into low earth orbit, geostationary orbit or to one of the L5 points and could make development of a facility on the Moon sustainable and support asteroid capture and mining. Once acceptable reliability has been demonstrated we would have eliminated a major obstacle to next generation nuclear power plants. The project could be justified on the basis of the waste disposal alone.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jun 1st, 2014 at 02:44:07 PM EST
[ Parent ]

Re: Keynes was wrong (none / 0)

Needless to say, such a system should be powered by renewables, probably wind and solar plus rather significant energy storage devices.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jun 1st, 2014 at 02:46:28 PM EST
[ Parent ]

Re: Keynes was wrong (4.00 / 2)

The reason everyone went for geological disposal is that it is reversible - All suggestions that end up in a situation where we cant get the stuff back if we decide to are irresponsible because we might well have uses for it once it is cooled of.

Nuclear waste straight out of a reactor is nasty stuff. Nuclear waste 500 years later.. is barely "hot" at all and contain a bunch of quite rare metals. in addition to the obvious: platinum, palladium, and technetium.

Tc is an beta-emmiter, but it has a very long halflife, doesn't exist in nature and makes nifty alloys.

This is why I tend to find concerns about really long term viability of storage a bit absurd. If we are still around at all, someone will be digging it back up.
And in an "no fossil fuels" context, noone will care.

Dry cask storage will do. Uhm. It'll probably do for the full five hundred years. There are older concrete structures than that standing, and casks are manufactured to a very high standard.

by Thomas on Sun Jun 1st, 2014 at 05:38:08 PM EST
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Re: Keynes was wrong (none / 1)

Nothing wrong with processing out as much useful elements as possible prior to disposal. But it would be a good idea to require that all long term storage be at +150 meters elevation or greater. I agree that it is possible to do nuclear acceptably well. I just seems that it is not probable, given our level of social competence. We can't even handle money without causing social catastrophe.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jun 1st, 2014 at 07:11:59 PM EST
[ Parent ]

Re: Keynes was wrong (4.00 / 2)

Dry cask storage will do. Uhm. It'll probably do for the full five hundred years. There are older concrete structures than that standing...

Modern concrete does not favorably compare to Roman concrete, which comprises a lot of the long standing concrete structures extant. Roman concrete used high alumina content volcanic ash as a major component. But not all volcanic ash is created equal. Again, I suspect that we could create concrete storage facilities that would last >500 years, but I am far from convinced that we will - due to lack of social competence.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jun 3rd, 2014 at 08:51:46 AM EST
[ Parent ]

Re: Keynes was wrong (4.00 / 3)

Scarcity is a failure of the imagination. Very recently there have been floods in the Western Balkans and the relief effort in Croatia has definitely been hamstrung by the "lack of money". Not lack of people or resources: lack of EUro-pegged fiat money to mbilize them.

In Italy, after the Aquila Earthquake, the Italian government was "forced" to raise fuel taxes in order to pay for disaster relief and reconstruction, because the necessary government expenditure would not be monetised by the ECB.

In Spain, years after the Lorca earthquake, in a region with ample resources idle as a result of the construction sector slump, reconstruction still hasn't begun because of... lack of fiat money.

I am not saying that after a natural disaster the wealth and productivity of the affected community won't be affected. I'm saying that there are two ways for that GDP hit to manifest itself: devaluation of the local currency, maybe inflation; or unemployment and permanent reduction of productivity, risk of insolvency from reduce aggregate income. Hard-money views end up producing unemployment, preventing the repair of damaged fixed capital, and generating a debt overhang through reduced growth. But the currency is "sound".

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Sun Jun 1st, 2014 at 07:04:54 AM EST
[ Parent ]

Re: Keynes was wrong (none / 0)

It's not very different from playing Civilization, really: would you ever let any of your cities lie idle, without producing anything?

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Sun Jun 1st, 2014 at 09:43:17 AM EST
[ Parent ]

Re: Keynes was wrong (none / 1)

What about insurance?

I'm not being flippant. New Zealand's current economic growth rate (4%) apparently owes a substantial amount to the reconstruction of the city of Christchurch, destroyed by earthquakes a couple of years ago, and which is largely funded by insurance money which is flooding in from overseas.

Surely the reconstruction efforts you mention should be covered by some sort of disaster insurance fund? And whether public or private, this would amount to the creation of money, wouldn't it?

_{It is rightly acknowledged that people of faith have no monopoly of virtue
- Queen Elizabeth II}

by eurogreen on Sun Jun 1st, 2014 at 12:05:14 PM EST
[ Parent ]

Re: Keynes was wrong (none / 1)

I presume Christchurch took out insurance before_ the earthquake?

My point is that the existence of a fiscal authority is the ultimate insurance policy.

So, what kinds of implicit guarantees are Eurozone governments providing that they shouldn't be in the business of providing? I can think of half a dozen off the top of my head:

deposit insurance for banks

granting limited liability to businesses

disaster relief

access to health care

access to education

access to legal redress

public safety

All of these are implicit guarantees that every citizen in Europe expects to enjoy relatively free of charge. These are large contingent liabilities of the state. Any and all of them could not be undertaken by a private entity that didn't charge hefty fees up front and wasn't adequately capitalised in case a particularly large claim presented itself. Would you pay a savings deposit insurance premium to an inadequately capitalised insurance company? (not that "sophisticated investors" didn't do exactly that when they bought CDS "protection" over the past 10 years) Would you incur risks with a full-liability entity having less capital than your potential loss? Would you trust you can be rescued from a disaster by an entity without the capital and operating income to actually fund a rescue operation? How about health insurance from an entity without the resources to pay for the treatment? How about your right to file a complaint to an entity without the necessary money to operate a grievance handling system? How about contracting physical security or firefighting services from an entity without the operating income to actually deploy security or firefighters?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Sun Jun 1st, 2014 at 12:38:08 PM EST
[ Parent ]

Re: Keynes was wrong (4.00 / 5)

Scarcity of money is the question of political motivation. Keynes (and Krugman, Marx, Piketty - and if we follow Michael Hudsom, we can add Adam Smith) foresaw money hoarding as an essential problem.

Zero Hedge returns to the broken windows fallacy often. They argue, the money for broken windows (or a disaster ravaged city) would have gone productively somewhere else. The Keynesian observation is actually - there come times when money is so strictly hoarded (or captured), that there is no selfish motivation to invest it anywhere productive. Things get so bad that it is then helpful to brake windows, dig holes, drop bombs.

Money functions basically as economic activity rights. When mathematics and politics combine to inevitably "stable" money concentration, and all power belongs to money holders, they will find the ways to keep their holdings valuable - or obtain everything else in return. That is why zerohedgy hyperinflation fears are pretty laughable - that will come when when People With Money will decide.

by das monde on Sun Jun 1st, 2014 at 01:10:12 PM EST
[ Parent ]

Re: Keynes was wrong (4.00 / 2)

By definition, scarcity means that there is not enough for everyone - with whatever money.

So let's introduce the concept of Democratic Deflation - democracy is inversely proportional to engineered scarcity.

The reality is of course there's plenty for everyone, as long as it's distributed fairly and not hoarded by those delusional individuals who believe they have a right to it.

Is there a point to enlighten everyone?

From the elite point of view, the idea is horrific.

Practically education is a game changer, because if you give as many people as good an education as possible, at least a few of them will research and invent the fuck out of the future.

You want real growth based on real activity? Educate, inform, and involve. Then stand back and watch what happens.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun Jun 1st, 2014 at 01:40:02 PM EST
[ Parent ]

Keynes was wrong | 57 comments (57 topical, 0 editorial, 0 hidden)

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