Tuesday, May 1, 2018

Duncan Foley On Socialist Alternatives to Capitalism

Yes, it is May Day, time to think about workers and socialism, while Vladimir Putin gets himself inaugurated for another term as President of Russia, with military vehicles parading In Red Square like they used to for the glory of the workers, but today for the glory of President Putin.

So, a couple of weeks ago there was a conference at the New School honoring Duncan Foley, who seems to be gradually retiring, half time to quarter time, I am not sure.  It is my understanding that this conference had a lot of emphasis on Duncan's work on Marxist economic theory, with it organized by Roberto Veneziani and Mark Setterfield.  I did not attend, but heard rumors about it.  As it is, this is the second conference there honoring Duncan.  I attended and presented in the first, which resulted in a festschrift volume in 2013, Social Fairness and Economics: Economic essays in the spirit of Duncan Foley, Routledge, an excellent volume.

The first thing that should be noted is that while Duncan is indubitably one of the leading living theorists of Marxist economics, he does not consider himself to be a "Marxist," but rather a student of Marx, if a deeply sympathetic one.  This is a sensitive matter as he was turned down for tenure at Stanford largely because he was accused of being a "Marxist economist" when he started publishing papers and books on Marxist economics.  He has always sais that his true ideology is his religion, Quakerism, the Friends, with him agreeing with their pacifism, which is not an idea inherent in Marxism, indeed, with many Marxists supporting violent revolution.  Nevertheless, there is probably no living economist who is clearly more important as a deep analyst of Mars's economics, with some of his closest rivals in attendance at this latest conference, such as Anwar Shaikh.

How he got into Marxist economics followed on from his earlier work on general equilibrium theory, which was what got him hired at Stanford in the first place (and he still writes on GET). Indeed, he had been hired at MIT from Yale to teach general equilibrium theory to grad students a la Arrow-Debreu-McKenzie, as this was not Paul Samuelson's cup of tea.  The motive for moving to Marx was the problem posed by fitting money into general equilibrium theory, which is generally done in a purely barter form.  This is also a cover for the problem of how to link micro to macro.  He was especially intrigued by Marx's writings on money in the Grundrisse and in Vol. III of Capital, which became the basis for his later interpretations and studies of this.

Again, I do not know what was presented or what he said at this most recent conference, but he has a working paper at New School from Feb. 2017 on "Socialist Alternatives to Capitalism I: From Marx to Hayek," which arguably shows his most recent thinking, not all that far from some of his earlier views, but more influenced by some of his more recent work on history of thought such as Adam's Fallacy, dealing with Adam Smith as well as Ricardo and Malthus.

Indeed, Duncan starts this paper with a discussion of post-Ricardian socialists such as Bray and Thompson, who proposed replacing money with labor-certificates, thus drawing on Ricardo's use of the labor theory of value. While he also briefly discusses the utopian socialists and Marx's reaction to them, he spends much more time on Marx's critique of this labor-certificate idea in the Grundrisse.  At its bottom, Marx in effect says that labor power's value is only instantiated in capitalist commodity exchange. So these labor-certificates will not really move a society towards socialism.  He also notes that in both Grundrisse, but even more so in the first two chapters of Capital Vol. III, Marx takes a long period position, noting that prices and wages may deviate from labor values even over entire rounds of the business cycle; that is only in the long run that prices oscillate about their natural "prices of production" given by labor values.

He then looks at Marx's own prescriptions for socialism in the 1875 Critique of the Gotha Program.  There are two stages, the first essentially being a mixed economy where workers still work in commodity production with markets, but with the surplus being taken by the state or some other entity led by the workers that would use it for public investment, social welfare, or redistribution.  The higher stage is that pure communism where the state withers away, and distribution is based on "from each according to his ability, to each according to his need," which Duncan notes is not backed up by any detailed institutional or other analysis, essentially a nice slogan.

He talks about the history of the early Soviet Union, noting that the NEP of the early 1920s looked like Marx's own first stage, but that it led to both the emergence of a neo-bourgeoisie as well as a "plodding behind the peasant."  This would be replaced by Stalin's command central planning, which achieved rapid industrial growth in the short run, but stagnated in the longer run.

He runs through Pareto and Barone and then the socialist calculation debate with Lange and Lerner and von Mises and Hayek.  He accurately sees the first two as laying the groundwork for an apolitical general equilibrium theory that could implemented either by a capitalist market or a central planner.  He notes that Lange's market socialist response is essentially an updated version of Barone, but trying to take the von Mises critique about appropriate incentives into account.  He says this is what became the policy of Deng Xiaoping in China, essentially a rerun of the 1920s Soviet NEP.

He ends with Hayek, noting his emphasis on information.  He says that Hayek essentially returns to classical political economy and engages in an "existential" redefinition of commodity production.  I am not sure I agree with this, but that is what he argues.  He makes a final critique of Hayek by noting his ignoring of the distributional question, certainly a valid complaint, and one to keep in mind on this May Day, even if Duncan Foley ultimately leaves us hanging on what are the most promising of socialist alternatives to capitalism today.

Addendum, 5/2/18:  So now I have read the follow piece by Duncan Foley, "Socialist Alternatives to Capitalism II: From Vienna to Santa Fe."  Should have read it before posting above. So it directly follows from the first one (and was written at the same time apparently), taking Hayek's redefineition of commodities as information seriously.  This is followed by a disquisition on top-down versus bottom-up socialist approaches.  He sees the Soviet failure as reflecting it top-down and de facto exploitive nature.  He says much nicer things about the worker management system of the former Yugoslavia, although without any analysis of how or why it failed. He bemoans the failure to fully follow through on Lenotief input-output matrices in the US, although the Dept of Commerce does have one that is periodically updated. He then makes a "speculative" effort at proposing a bottom-up form of quasi-socialism for the US, which he calls "Lifenet."  It somewhat resembles cooperatives, but operates through information-sharing systems.  He proposes how this could lead to dynamic adjustements over time in markets, but without accumulating concentrations of wealth and inequality.  I guess this is the Santa Fe of the title.  I can see potential problems with it, and he admits it is not fully worked out and is "speculative," but at least it is something.

Barkley Rosser

57 comments:

Anonymous said...

http://www.economicpolicyresearch.org/media/k2/attachments/NSSR_WP_052017.pdf

February, 2017

Socialist alternatives to capitalism I: Marx to Hayek
By Duncan Foley

http://www.economicpolicyresearch.org/media/k2/attachments/NSSR_WP_062017.pdf

February, 2017

Socialist alternatives to capitalism II: Vienna to Santa Fe
By Duncan Foley

Anonymous said...

http://www.economicpolicyresearch.org/media/k2/attachments/NSSR_WP_052017.pdf

February, 2017

Socialist alternatives to capitalism I: Marx to Hayek
By Duncan Foley

The Soviets, whose leadership contained some remarkably talented and thoughtful figures, such as Nikolai Bukharin, arrived at a practical solution to the problem of organization of day-to-day production fairly soon after consolidating political power through prevailing in the Civil War with the Whites. This took the form of the “New Economic Policy” (NEP), which allowed, and indeed encouraged, capitalist commodity production in many sectors of the economy, including food production. The NEP structurally created a “mixed” economy in which a large private sector co-existed with state-sponsored industrial enterprises. (The NEP is recognizably a precursor of Deng Xiaoping’s “socialist market economy” which was the framework for Chinese economic growth in recent years.) The NEP worked well to stabilize the Soviet economy after the Civil War; under this regime output and incomes recovered significantly from the low levels of the Civil War period. Many Bolsheviks, including Lenin, were willing to accept the NEP framework as an indefinitely prolonged phase of building socialism, as long as the state held the “commanding heights” of the economy through control of energy, transportation, heavy industry, and finance....

rosserjb@jmu.edu said...

Thanks for the link, Anonymous. II on Vienna to Santa Fe should be interesting.

AXEC / E.K-H said...

Note on Duncan Foley On Socialist Alternatives to Capitalism

Marx never came to grips with profit and After-Marxians did not spot and rectify his blunders in the past 130+ years. See

Profit: after 200+ years still elusive
https://axecorg.blogspot.de/2018/04/profit-after-200-years-still-elusive.html

Karl Marx, fake scientist
https://axecorg.blogspot.de/2017/08/karl-marx-fake-scientist.html

Ricardo and the invention of class war
https://axecorg.blogspot.de/2018/02/ricardo-and-invention-of-class-war.html

Capitalism, poverty, exploitation, and cross-over exploitation
https://axecorg.blogspot.de/2018/04/capitalism-poverty-exploitation-and.html

DSGE and profit―forget it! MMT and profit―forget it!
https://axecorg.blogspot.de/2018/03/dsge-and-profit-forget-it-mmt-and.html

Keynes, Lerner, MMT, Trump and exploding profit
https://axecorg.blogspot.de/2017/12/keynes-lerner-mmt-trump-and-exploding.html

Economics is a lost field. Because the foundational concept profit is false the whole analytical superstructure is false: Walrasianism, DSGE, Keynesianism, Post Keynesianism, MMT, Marxianism, Austrianism are mutually contradictory, axiomatically false, and materially/formally inconsistent. Duncan Foley, as well as Barkley Rosser, ultimately leaves us hanging on what is the most promising alternative to failed economics.

Egmont Kakarot-Handtke

Anonymous said...

http://www.economicpolicyresearch.org/media/k2/attachments/NSSR_WP_052017.pdf

February, 2017

Socialist alternatives to capitalism I: Marx to Hayek
By Duncan Foley

Really existing socialism

The Soviets, whose leadership contained some remarkably talented and thoughtful figures, such as Nikolai Bukharin, arrived at a practical solution to the problem of organization of day-to-day production fairly soon after consolidating political power through prevailing in the Civil War with the Whites. This took the form of the “New Economic Policy” (NEP), which allowed, and indeed encouraged, capitalist commodity production in many sectors of the economy, including food production. The NEP structurally created a “mixed” economy in which a large private sector co-existed with state-sponsored industrial enterprises. (The NEP is recognizably a precursor of Deng Xiaoping’s “socialist market economy” which was the framework for Chinese economic growth in recent years.) The NEP worked well to stabilize the Soviet economy after the Civil War; under this regime output and incomes recovered significantly from the low levels of the Civil War period. Many Bolsheviks, including Lenin, were willing to accept the NEP framework as an indefinitely prolonged phase of building socialism, as long as the state held the “commanding heights” of the economy through control of energy, transportation, heavy industry, and finance.

Two connected and predictable developments undermined the NEP. First, as we would expect, the privatized commodity-producing sector of the economy exemplified some fundamental laws in generating large disparities in income and wealth. The appearance of a wealthy proto-bourgeoisie in the midst of a society governed by a one-party dictatorship committed to socialist goals threatened the narrow political base of Bolshevik power. Second, the NEP was structurally favorable to the agricultural sector, particularly to the market-oriented strata of the peasants. The NEP thus resulted in a relatively “balanced” path of economic growth between industry and agriculture. Not surprisingly the prices of food and other agricultural products tended to rise relative to industrially produced goods, limiting the degree to which surplus production in agriculture could be mobilized for rapid industrial investment....

Anonymous said...

What should be made clear then is why the "NEP-like" Chinese economic structure has been such a dramatic success since 1977:

https://fred.stlouisfed.org/graph/?g=gxac

August 4, 2014

Real per capita Gross Domestic Product for China, Germany, India, Japan and United States, 1977-2016

(Percent change)

https://fred.stlouisfed.org/graph/?g=gxae

August 4, 2014

Real per capita Gross Domestic Product for China, Germany, India, Japan and United States, 1977-2016

(Indexed to 1977)

Anonymous said...

Not surprisingly the prices of food and other agricultural products tended to rise relative to industrially produced goods, limiting the degree to which surplus production in agriculture could be mobilized for rapid industrial investment....

-- Duncan Foley

[ Why should this be correct in theory? This has not been correct in China in actuality. ]

rosserjb@jmu.edu said...

anne - onymous,

In Chiba Deng's policy initially favored agriculture, which took off in the 1980s. But then it shifted back to favoring industry, and farmers are among the least satisfied groups in China right now. If NEP had remained in place, this might have happened also in the USSR.

A big difference between 1920s Soviet Union and 1980s China is that the former was put in place prior to any collectivization of agriculture while the latter was put in place following its dismantlement. So Stalin wanted a strong industrialization push and saw ag collectivization as the way to get it. In China they had already seen the problems of ag collectivization, so did not re-impose it when ag prices went up in the 80s, moving farmer incomes up also.

rosserjb@jmu.edu said...

Egmont,

One can argue with Marx's theory of profit, but it is a deep and serious theory Your is all about taking account of retained earnings, nothing more, nothing else. It is completely useless and vacuous, revealing nothing of any importance to anybody other than to remind people who already know it that if they are modeling private capital formation they need to take account of retained earnings. This has bwwn repeatedly pointed out to you before, although you never admit it or acknowledge it. So how about doing so rather than making yourself look like the Mad Economist with your rantings about how nobody gets your silly and vacuous theory?

rosserjb@jmu.edu said...

Folks,

I could use some advice, please, from whoever is behind he scenes at Econospeak these days. On two of my three computers now, when I tryu to connect to blogger.com, I am sent to a site where they insist that I must create a new blog or they think that is what I want to do, which I don't. But I have not been able to figure out how to get from there to the Econospeak site. Anybody who knows how to do that, please help me. This computer I am on right now is the one I use the least and is a bit of a pain to get to. I am on it now only to get at blogger.com and make that addendum I just added. I do not want to be in this office, my journal editorial office, right now as I am busy with final exams and other things right now. Please help. If I go out of town, I shall not be able to access Econospeak except through comments on ecxisting posts, as my laptop has just pulled this same stunt, sending me to the perdition of "do you want to start a new blog? [no, thank you; take me to Econospek!]."

vertegaa@vcn.bc.ca said...

"One can argue with Marx's theory of profit, but it is a deep and serious theory"
The same can probably be said for Hayek's theory, about which Keynes aptly remarked: "... how, starting with a mistake, a remorseless logician can end up in bedlam." For those interested, my own recent take on Marx's theory can be found here: http://www.vcn.bc.ca/~vertegaa/Marx_Debunked.pdf

critiques welcome

Barkley Rosser said...

anne -onymous,

As a followup, let me note that another way the Deng plan might have played out in USSR if the NEP had remained in place is on the matter of equality. Foley notes that the appearance of a "ne-bourgeoisie" was a matter of concern for those who opposed the NEP, and indeed that group was done in by the collectivization of ag (along with millions dead in famine), as well as the move to centrally command plan a heavy industrialization push that would provide the armor and tanks used to win the battles of Stalingrad and Kursk (the reason V.V. Putin is rehabilitating Stalin).

As it is, in Chins that neo-bourgeoisie was not squashed out and has flourished, and the rapid growth of PRC GDP has been accompanied by a massive in crease in inequality to a level about the same as that in the US. It should also be noted that the collapse of the social safety net in the 80s and 90s coincided with a measured decline in reported happiness levels in China, which bottomed out around 2005. The upturn, still going on, more or less coincided with efforts to reintroduce the social safety net and to encourage economic growth in the interior. An important recent move has been the introduction of a universal old age pension in rural areas in 2013. Few things make people happier than social security, really.

AXEC / E.K-H said...

Barkley Rosser

You say: “One can argue with Marx’s theory of profit, but it is a deep and serious theory.”

Fact is that the philosopher/agenda pusher/fake scientist Marx had no idea what profit is.#1 And because the foundational concept is false the whole analytical superstructure is false.

Marx’s Capital is NOT a piece of materially/formally consistent science but sociological/philosophical/political BS or what Feynman called cargo cult science.

This is obvious to anybody with a modicum of scientific competence which a priori excludes you. The deep and serious question is why economists tirelessly recycle long-dead proto-scientific stuff.

Egmont Kakarot-Handtke

#1 Profit for Marxists
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2414301

Thornton Hall said...

How on earth did we get here? So much fiction.

Thornton Hall said...

I mean, one reads a scientist of human behavior and evolution like E.O. Wilson, and then one reads the above... the mind boggles.

How did everyone agree to use these terms, especially since they are all at least 3 levels of abstraction away from the empirical world? How did they all agree to use totally arbitrary math in the same way so that they can argue about who did the math right? Where does one start?

Of course Egmont sounds like a lunatic! He’s trying to express on paradigm in terms of another. And you people keep saying “that’s not really our paradigm because quibble quibble quibble.”

It’s like Darwin arguing with Thomas Acquinas and Aquinas keeps saying “You are so confused about the concept of the soul.”

No shit, Sherlock! You want me to learn all this nonsense about the soul just so I can explain that it’s nonsense?

Barkley Rosser said...

Actually, Thornton, if you go back and read Egmont's stuff that he he has put up here many times, it is not a new paradigm at all. It is just a minor accounting variation on basic Keynesian national income and product accounts, with, as I have repeatedly pointed out, him making a big deal about focusing on the role of retained earnings when defining profit in accounting terms. It is all just accounting of the most boring sort.

What makes it appear to be something else is all of Egmont's extraneous speechifying, supported by unpublished and largely unpublishable papers (he has managed to publish one and only one, near as I can tell), that he has posted on SSRN, which basically just repeat what he puts up here repeatedly, his axioms, their minor variations, plus, of course his denunciations of all major economics schools of thought.

So it is quite easy to find flaws with Smith and Marx and Keynes and Hayek, which he does, not to mention a lot of others, nearly all economists aside from a handful he cherry picks silly quotes from to bolster his screeds. I even agree with many of his criticisms, although he has fallen on his face with his few attempts to put down behavioral economics, which is largely immune to his criticisms. And, of course, the bottom line problem for all the schools is that according to him they have the wrong theory of profit, and this is the most important thing in all economics (wrong), although this is part of why his slings on behavioral econ fall flat as they have no theory of profit to dump on.

But then, after all these denunciations, when we finally come to the grand presentation of his one and only true theory of profit, it turns out to be, as I said above, a minor accounting variation on Keynesian income and product accounts, a variation well known and long accounted for by the relevant economists who have a need to deal with this minor variation (all about retained earnings! the ultimate meaning of all economics!). It is a giant nothingburger involving no paradigm shift or anything at all of any serious interest to anybody. Really. I suggest you check his stuff out in detail as he invites you to do. That is what you will find out in the end. A tiny little smidgen already well known and accounted for by the relevant parties.

Anonymous said...

In China, Deng's policy initially favored agriculture, which took off in the 1980s. But then it shifted back to favoring industry, and farmers are among the least satisfied groups in China right now. If NEP had remained in place, this might have happened also in the USSR.

A big difference between 1920s Soviet Union and 1980s China is that the former was put in place prior to any collectivization of agriculture while the latter was put in place following its dismantlement. So Stalin wanted a strong industrialization push and saw agricultural collectivization as the way to get it. In China they had already seen the problems of agricultural collectivization, so did not re-impose it when agricultural prices went up in the 80s, moving farmer incomes up also.

-- Barkley Rosser

Anonymous said...

As a followup, let me note that another way the Deng plan might have played out in USSR if the NEP had remained in place is on the matter of equality. Foley notes that the appearance of a "neo-bourgeoisie" was a matter of concern for those who opposed the NEP, and indeed that group was done in by the collectivization of agriculture (along with millions dead in famine), as well as the move to centrally command plan a heavy industrialization push that would provide the armor and tanks used to win the battles of Stalingrad and Kursk (the reason V.V. Putin is rehabilitating Stalin).

As it is, in China that neo-bourgeoisie was not squashed out and has flourished, and the rapid growth of PRC GDP has been accompanied by a massive increase in inequality to a level about the same as that in the US. It should also be noted that the collapse of the social safety net in the 80s and 90s coincided with a measured decline in reported happiness levels in China, which bottomed out around 2005. The upturn, still going on, more or less coincided with efforts to reintroduce the social safety net and to encourage economic growth in the interior. An important recent move has been the introduction of a universal old age pension in rural areas in 2013. Few things make people happier than social security, really.

-- Barkley Rosser

Anonymous said...

Not surprisingly the prices of food and other agricultural products tended to rise relative to industrially produced goods, limiting the degree to which surplus production in agriculture could be mobilized for rapid industrial investment....

-- Duncan Foley

In its day this was known as the "scissors crisis," for the price lines of agricultural and industrial goods, the former moving up and the latter moving down, posed together the right way to look like scissors.

Essentially the rising price of agricultural goods in a more or less market economy (with some state guidance and some state ownership) meant that resources and investments flowed into the agricultural sector. Bukharin, whom Foley praises, supported this as "genetic balanced" growth. Initially Stalin supported his view as long as Trotsky was around and criticizing it in favor of the forced industrialization approach. Stalin famously changed sides in the debate in 1928 after Trotsky was exiled in 1927. The first Five Year Plan with its deadly agricultural collectivization drive and push for rapid industrialization began in 1929. This also coincided with the end of a period that saw innovative and "modern" art going on in USSR, to be followed by a rigid conformity to socialist realism and other highly conservative forms.

-- Barkley Rosser

Anonymous said...

Barkley Rosser has written splendidly, no matter any subsequent criticism that may come to mind. Splendidly considered.

Anonymous said...

Socialism with Chinese characteristics:

https://twitter.com/BillGates/status/985919352879898625

Bill Gates @BillGates

1,200 scientists, 65,000 local officials, 140,000 industry representatives, and 21 million farmers. This is a story about how data can help change the world.

https://www.nature.com/articles/nature25785

Pursuing sustainable productivity with millions of smallholder farmers

9:34 AM - 16 Apr 2018

Anonymous said...

Socialism with Chinese characteristics:

https://www.nature.com/articles/nature25785

March 15, 2018

Pursuing sustainable productivity with millions of smallholder farmers
By Zhenling Cui, Hongyan Zhang, Xinping Chen, Chaochun Zhang, Chengdong Huang, Weifeng Zhang, Guohua Mi, Yuxin Miao, et al.

Abstract

Sustainably feeding a growing population is a grand challenge, and one that is particularly difficult in regions that are dominated by smallholder farming. Despite local successes, mobilizing vast smallholder communities with science- and evidence-based management practices to simultaneously address production and pollution problems has been infeasible. Here we report the outcome of concerted efforts in engaging millions of Chinese smallholder farmers to adopt enhanced management practices for greater yield and environmental performance. First, we conducted field trials across China’s major agroecological zones to develop locally applicable recommendations using a comprehensive decision-support program. Engaging farmers to adopt those recommendations involved the collaboration of a core network of 1,152 researchers with numerous extension agents and agribusiness personnel. From 2005 to 2015, about 20.9 million farmers in 452 counties adopted enhanced management practices in fields with a total of 37.7 million cumulative hectares over the years. Average yields (maize, rice and wheat) increased by 10.8–11.5%, generating a net grain output of 33 million tonnes (Mt). At the same time, application of nitrogen decreased by 14.7–18.1%, saving 1.2 Mt of nitrogen fertilizers. The increased grain output and decreased nitrogen fertilizer use were equivalent to US$12.2 billion. Estimated reactive nitrogen losses averaged 4.5–4.7 kg nitrogen per Megagram (Mg) with the intervention compared to 6.0–6.4 kg nitrogen per Mg without. Greenhouse gas emissions were 328 kg, 812 kg and 434 kg CO2 equivalent per Mg of maize, rice and wheat produced, respectively, compared to 422 kg, 941 kg and 549 kg CO2 equivalent per Mg without the intervention. On the basis of a large-scale survey (8.6 million farmer participants) and scenario analyses, we further demonstrate the potential impacts of implementing the enhanced management practices on China’s food security and sustainability outlook.

Anonymous said...

Socialism with Chinese characteristics:

http://www.xinhuanet.com/english/2018-04/25/c_137135163.htm

April 25, 2018

Hunting down malaria in Comoros -- another China-Africa story
By Yao Yuan and Wen Hao

NAIROBI -- Comoros, a small African country located in the Indian Ocean, is pursuing a total annihilation of malaria, five years after a Chinese-backed project drove out the lethal disease from its two islands.

The archipelago nation is currently discussing collaboration to achieve that goal in three years together with Chinese scientists, who confirmed this to Xinhua ahead of the World Malaria Day that falls on Wednesday.

The Chinese team hopes that the Comoros victory, using a Chinese-developed drug and an unconventional approach, can pave a new trail for the battle against this mosquito-borne disease.

Malaria kills about half a million people every year in the world, with Africa claiming some 90 percent of the casualties. Comoros, however, is among the few African nations that now seem ready to shake off this stigma.

Song Jianping, who heads the visiting team from Guangzhou University of Chinese Medicine (GZUCM) of southern China, said that they aim to help Comoros basically annihilate malaria by 2020. Researchers from GZUCM helped administer the 2007-2013 projects with medicines donated by China.

They will pinpoint the remaining infection areas and apply small-scale mass drug administration (MDA), said Song, director of GZUCM's Tropical Medicine Institute.

For many residents in Comoros, malaria and the horrors it invokes are already becoming a fading memory.

Nassurddine Houssen, 51, remembered how his parents used to spend every evening worrying about the cost of buying mosquito coils. Malaria kills a child every two minutes.

"During my childhood, I knew many friends (who were) killed by the mosquito disease (malaria)," said Houssen, a resident of Anjouan Island. "My younger sister nearly died from it."

"Children died, and we did not know exactly why. Many parents thought it was because of the demon," said Echat Malide, director of Anjouan's Hombo Hospital, recalling a time when malaria affected two thirds of Comoros' population of 800,000 and was the top killer disease on the islands off Africa's southeastern coast.

The tides of change began in 2007, when a team of Chinese scientists introduced an anti-malaria project to the island of Moheli before extending it to Anjouan in 2012 and Grande Comore in 2013. On the three islands, it led to a 98-percent drop in malaria cases, from over 100,000 to 1,300 a year, said Chinese Ambassador to Comoros He Yanjun.

Unlike traditional methods of killing mosquitoes and preventing mosquito bites, the project asked residents to simultaneously take medicine to flush out the malaria parasites in the procedure called MDA.

It builds on the concept that mosquitoes are vectors passing the parasites from person to person. Therefore, if the human "source" is purged, the mosquitoes will have no bugs left to pass on.

Five years after the project, Comoros' two islands of Moheli and Anjouan are today considered malaria-free. Officials said that all 16 cases in 2016 were "imported". The island of Grande Comore, where the MDA participation rate was lower than the two islands, recorded 1,641 cases in 2016.

ENDING SCOURGE ...

rosserjb@jmu.edu said...

BTW, for anybody unaware of it, this Saturday, also Cinqo de Mayo, happens to bre the bicentennial of the birth of Karl Marx.

AXEC / E.K-H said...

Profit and the Private-Property-Irrelevance Theorem
Comment on Barkley Rosser on ‘Duncan Foley On Socialist Alternatives to Capitalism’

When proven to be a fake scientist without any understanding of the foundational economic concept of profit, Barkley Rosser answers: “But then, after all these denunciations, when we finally come to the grand presentation of his one and only true theory of profit, it turns out to be, as I said above, a minor accounting variation on Keynesian income and product accounts, a variation well known and long accounted for by the relevant economists who have a need to deal with this minor variation (all about retained earnings! the ultimate meaning of all economics!). It is a giant nothingburger involving no paradigm shift or anything at all of any serious interest to anybody.”

The surrealism of the matter is that the economist Barkley Rosser comments on Capitalism and Socialism and has no idea about what profit is. Fact is that he spent is academic life with behavioral economics which is not more than a mix of sociology/psychology/anthropology for cargo cult scientists. Barkley Rosser never understood that economics is NOT a social science but a system science.

Here are the facts. Economics is a scientific failure.#1 What first of all has to be done is the paradigm shift from microfoundations to macrofoundations.#2 From the correct axiomatic foundations then follows the macroeconomic Profit Law with increasing complexity:#3
Qm=−Sm in the elementary production-consumption economy,
Qm=I−Sm in the elementary investment economy (note I is NEVER equal Sm),
Qm=(G−T)+I−Sm in the investment economy with government deficit/surplus,
Qm=Yd+(X−M)+(G−T)+I−Sm in the open economy with distributed profit.
Legend: Qm monetary profit/loss, Sm monetary saving/dissaving, I investment expenditures, G government spending, T taxes, X export, M import, Yd distributed profit.

Written as sectoral balances this gives (X−M)+(G−T)+(I−Sm)−(Qm−Yd)=0. The axiomatically correct sectoral balances equation compares to the false equation (X−M)+(G−T)+(I−Sm)=0 which goes back to Keynes and constitutes to this day the explicit formal foundation of Post-Keynesianism and MMT.#4

The Profit Law says in the most elementary version that profit for the economy as a whole is equal to dissaving, that is, it has NOTHING at all to do with exploitation, greed, constrained optimization or any other psycho-social factors.#5 The comprehensive Profit Law consists exclusively of measurable variables, therefore, macroeconomic profit can be objectively determined with the accuracy of two decimal places.

The Profit Law holds for the monetary economy, no matter on which historical stage the economy actually is, and it is independent of the given legal order, in particular absolutely independent of the definition of property rights. In other words, the Profit Law holds for capitalist USA, communist Soviet Union, socialist/mixed Russia, and state/social China.

Because economists NEVER understood profit and have NEVER figured out the correct macroeconomic Profit Law, society is plagued since 200+ years with a brain-dead political discussion about Capitalism and Socialism and an economic policy guidance that has NO sound scientific foundation.

For the welfare of society, failed/fake economists are worse than the Four Horsemen.

Egmont Kakarot-Handtke

#1 Economics: 200+ years of scientific incompetence and fraud
https://axecorg.blogspot.de/2017/06/economics-200-years-of-scientific.html

#2 True macrofoundations: the reset of economics
https://axecorg.blogspot.de/2017/05/true-macrofoundations-reset-of-economics.html

#3 Rethinking the Profit Law
https://axecorg.blogspot.de/2016/12/rethinking-profit-law.html

#4 Rectification of MMT macro accounting
https://axecorg.blogspot.de/2017/09/rectification-of-mmt-macro-accounting.html

#5 Capitalism, poverty, exploitation, and cross-over exploitation
https://axecorg.blogspot.de/2018/04/capitalism-poverty-exploitation-and.html

rosserjb@jmu.edu said...

LOL.

So. Thornton, Egmont has done you a favor and laid it all out, completely verifying everything I said. His system is a minor accounting variation on the basic Keynesian national income and accounting system, with only accounting for YD, distributed profit, as the difference. Of course, distributed profit is that which is not retained earnings, so I have pinpointed exactly what his "innovation" is, which has long been known by anybody even remotely aware of Principles of Macroeconomics, this is so utterly trivial. No paradigm shift here at all remotely, just a bunch of niggling over minor accounting, then turned into massive speechifying about (nearly) all of economics.

Truly pathetic. Such an embarrassment.

rosserjb@jmu.edu said...

BTW, folks, my IT people on campus here have helped me straighten out my problems accessing blogger.com. I am fully functional for doing that on all my computers again.

Oh, and thanks to anne -onymous for her kind remarks.

vertegaa@vcn.bc.ca said...

"profit for the economy as a whole is equal to dissaving"

Dissaving of what? I'm waiting with bated breath for Egmont's theory of money, not! Since it was already made clear to me that this won't be forthcoming, I'll settle for an explanation of how something that starts its existence as a to be resolved debt (i.e. a negative), within his objective "scientific" paradigm turns into a dissavable positive. Without a sensible answer, Egmont's "paradigm" is nothing but a collection of ad hoc identities, interesting in its ability to provide true answers in part, but unable and useless to provide a closing depiction of the whole.

John V

PS, I'm equally interested in an answer by way of some conventional economic theory. MMT doesn't pass muster either, as can be inferred from an older paper of mine: http://www.vcn.bc.ca/~vertegaa/MMT_Critique.pdf

PPS, "Behavioral economics" is lipstick on a pig when the pig represents an economy that _is_, when in the real world an economy is always underway to becoming to be; and thus its values, "behaviorally" influenced or not, are indeterminate at all points in time.

AXEC / E.K-H said...

Barkley Rosser

Barkley Rosser is in great danger to lose his last two brain cells: “So. Thornton, Egmont has done you a favor and laid it all out, completely verifying everything I said. His system is a minor accounting variation on the basic Keynesian national income and accounting system, with only accounting for Yd, distributed profit, as the difference.”

The axiomatically based macroeconomic Profit Law is NOT a variation of the Keynesian income and accounting system but the REFUTATION of the formal foundation of Keynesianism. Because the formal foundations are false the whole analytical superstructure of Keynesianism is false.

For details see:

How Keynes got macro wrong and Allais got it right
https://axecorg.blogspot.de/2016/09/how-keynes-got-macro-wrong-and-allais.html

Keynes’ Missing Axioms
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1841408

The Common Error of Common Sense: An Essential Rectification of the Accounting Approach
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2124415

Why Post Keynesianism Is Not Yet a Science
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1966438

For the full-spectrum refutation of Keynesianism/Post-Keynesianism/MMT see cross-references Keynesianism
http://axecorg.blogspot.de/2016/09/keynesianism-cross-references.html

Keynes did NOT get profit right and every economist with more than two brain cells knows this: “His Collected Writings show that he wrestled to solve the Profit Puzzle up till the semi-final versions of his GT but in the end he gave up and discarded the draft chapter dealing with it.” (Tómasson et al.)

Egmont Kakarot-Handtke

Anonymous said...

RE: NEP in USSR vs China, and why the former fell apart and the latter kept on going. Sure, the structural similarities (e.g. inequality) are there in both, but there were two big differences. The first was that Deng encouraged foreign investment, while the Soviets had to be more underground about it (e.g. Amtorg) and could not allow the kind of direct investment Deng encouraged—no private ownership in foreign hands. The second, and bigger, difference: Stalin (vs Deng). Stalin had to kill NEP in the battle for power, because NEP was Bukhain’s brainchild (he really developed the idea after Lenin’s death), adn the Bolsheviks took their theory seriously. That Stalin needed to speed up ehavy industry to fight a likely war in Europe was icing on the cake. Plus, the peasantry had made one revolution; Stalion was damned if they were going to make another on his watch.

Politics, politics, politics.

Anonymous said...

And sorry for the typos. Typing on an ipad is harder than it seems.

rosserjb@jmu.edu said...

anne -onymous,

Two problems with your last remark (not the one about typos). One is that it was not so much the Soviets keeping out foreign investment officially so having to sneak it in through AMTORG, etc., but that most foreign companies did not seek to invest in the USSR both because of the opposition of their governments that were seeking to topple the Soviet regime, as well as their well-founded fear of being confiscated. Neither of these held during the Deng period.

The other is that NEP was not post-Lenin. He started it in 1921 after the Bolsheviks won the civil war and to appease various strikers as well as to deal with outright famine occurring because the farmers were refusing to plant in the face of outright and uncoordinated seizures of crops by the authorities. Arguably it was instituted after Lenin was fully healthy and on top of things, and Bukharin was certainly a main driving force behind it, but Lenin gave it his full approval and support prior to his death in 1923.

rosserjb@jmu.edu said...

Egmont,

My last comment on your stuff for this thread. Please look at what you posted. The only difference between your accounting scheme, and that is all it is, not a theory of anything, and Keynes's NIPA scheme, is Yd. This is so unimportant that it not even worthy of being called "trivial." It is less than trivial, way less than trivial. Sorry about that, old boy.

Wallfly said...

BR, I wonder if sometimes if you have a personal or professional connection to EGH which makes you feel you should let him post here (for therapeutic reasons?), but you don't have to, do you?

Anonymous said...

"RE: NEP in USSR vs China, and why the former fell apart and the latter...

Politics, politics, politics."

"Two problems with your last remark (not the one about typos)...."

[ The comment in question was not mine.

Anne ]

Anonymous said...

NEP in USSR vs China, and why the former fell apart and the latter kept on going: Sure, the structural similarities (e.g. inequality) are there in both, but there were two big differences. The first was that Deng encouraged foreign investment, while the Soviets had to be more underground about it (e.g. Amtorg) and could not allow the kind of direct investment Deng encouraged—no private ownership in foreign hands. The second, and bigger, difference: Stalin (vs Deng). Stalin had to kill NEP in the battle for power, because NEP was Bukharin’s brainchild (he really developed the idea after Lenin’s death), and the Bolsheviks took their theory seriously. That Stalin needed to speed up heavy industry to fight a likely war in Europe was icing on the cake. Plus, the peasantry had made one revolution; Stalin was damned if they were going to make another on his watch.

Politics, politics, politics.

[ Not Anne]

Anonymous said...

Two problems with this last remark. One is that it was not so much the Soviets keeping out foreign investment officially so having to sneak it in through AMTORG, etc., but that most foreign companies did not seek to invest in the USSR both because of the opposition of their governments that were seeking to topple the Soviet regime, as well as their well-founded fear of being confiscated. Neither of these held during the Deng period.

The other is that NEP was not post-Lenin. He started it in 1921 after the Bolsheviks won the civil war and to appease various strikers as well as to deal with outright famine occurring because the farmers were refusing to plant in the face of outright and uncoordinated seizures of crops by the authorities. Arguably it was instituted after Lenin was fully healthy and on top of things, and Bukharin was certainly a main driving force behind it, but Lenin gave it his full approval and support prior to his death in 1923.

-- Barkley Rosser

Anonymous said...

Again, I think the post and thread are superb and the entire discussion should be repeated. A matter that still needs much discussion however is China. The Chinese have a communist political-economic system with, as Xi Jinping always adds, Chinese characteristics. The Chinese political-economic system is communist and has been remarkably successful and Western analysts need to understand this.

Anonymous said...

What remarkable success means:

https://twitter.com/JustinSandefur/status/991434987781132290

Justin Sandefur‏ @JustinSandefur

So in my lifetime, China's basically lived the GDP equivalent of American history from Thomas Jefferson to FDR.

Branko Milanovic @BrankoMilan

Some historical statistics: Growth rates of GDP per capita of China and the US when they were at the same levels of income (GDPpc)

[Graph]

2:51 PM - 1 May 2018

Anonymous said...

Imagine the gains in well-being for the Chinese since 1977, imagine that there is repeated emphasis on ending severe poverty by 2020. Understanding what China has and is accomplishing is critically important.

Anonymous said...

https://fred.stlouisfed.org/graph/?g=ejRT

August 4, 2014

Real per capita Gross Domestic Product for China, United States,
India, Japan and Germany, 1977-2016

(Percent change)

https://fred.stlouisfed.org/graph/?g=ejRU

August 4, 2014

Real per capita Gross Domestic Product for China, United States,
India, Japan and Germany, 1977-2016

(Indexed to 1977)

Anonymous said...

Here is what a lack of understanding of China amounts to:

http://www.bradford-delong.com/2015/12/ever-since-i-became-an-adult-in-1980-i-have-been-a-stopped-clock-with-respect-to-the-chinese-economy-i-have-said-alw.html

December 1, 2015

China's Market Crash Means Chinese Supergrowth Could Have Only 5 More Years to Run

Now that 90 days have passed, from the Huffington Post from Last August: *

Ever since I became an adult in 1980, I have been a stopped clock with respect to the Chinese economy. I have said--always--that Chinese supergrowth has at most ten more years to run, and more probably five or less. There will then, I have said, come a crash--in asset values and expectations if not in production and employment. After the crash, China will revert to the standard pattern of an emerging market economy without successful institutions that duplicate or somehow mimic those of the North Atlantic: its productivity rate will be little more than the 2%/year of emerging markets as a whole, catch-up and convergence to the North Atlantic growth-path norm will be slow if at all, and political risks that cause war, revolution, or merely economic stagnation rather than unexpected but very welcome booms will become the most likely sources of surprises.

* http://www.huffingtonpost.com/brad-delong/china-market-crash-5-years_b_8045742.html

-- Brad DeLong

Anonymous said...

Here is what a lack of understand of China amounts to:

http://www.bradford-delong.com/2016/04/must-read-i-do-not-understand-china-but-it-now-looks-more-likely-than-not-to-me-that-xi-jinpings-rule-will-lose-china.html

April 5, 2016

I do not understand China. But it now looks more likely than not to me that Xi Jinping's rule will lose China a decade, if not half a century... *

* http://www.economist.com/news/china/21695923-his-exercise-power-home-xi-jinping-often-ruthless-there-are-limits-his

-- Brad DeLong

Anonymous said...

Imagine that Francis Fukuyama could write about the end of history in 1989, never thinking about China. History however did not end in 1989 or 1999 or 2009 and China is writing history still and needs to be appreciated as such.

Anonymous said...

Just a quick correction of BR: Lenin might have pushed NEP as a peredyshka, but he was moving out of the political loop thereafter. Bukharin developed and legitimated (temporarily) NEP as an alternative form of (Soviet) socialism that served as a basis for later experiments in market socialism. Give credit where credit is due. For more, see Stephen Cohen, Bukharin and the Bolshevik Revolution. Even critics of Cohen focus more on Bukharin's capacity to be the real leader Cohen claimed; but if Lenin instituted NEP, Bukharin--once the supporter of more radical measures--made it his. If NEP were truly Lenin's, Stalin or those later could have turned to it; as it turned out, NEP remained associated with Bukharin, and so would have to wait until glasnost/Gorbachev before it could be mentioned. Cohen himself helped NEP return under Gorby, but by then it was too late for the Soviet economy--too many bureaucrats were too entrenched. (Compare to China, where the Cultural Revolution had weakened the economic bureaucracy and allowed Deng to skirt them and go to enterprise managers and local elites to implement the Chinese version of NEP.)

AXEC / E.K-H said...

Barkley Rosser

I have rated your scientific competence already with zero but now things are getting even worse.

It should NOT be too difficult even for a dim-witted economist to see the difference between the two balances equations:
(i) (X−M)+(G−T)+(I−S)−(Q−Yd)=0, AXEC=axiomatically true,
(ii) (X−M)+(G−T)+(I−S)=0, Post-Keynesianism/MMT=false.

When simplified to the bare bones, i.e. X, M, G, T, Yd all 0, then we have:
(iii) Q=I−S macroeconomic profit is given as the difference between investment and saving,
(iv) I=S saving equals investment.

Eq. (iv) is the Keynesian Ur-blunder: “Income = value of output = consumption + investment. Saving = income − consumption. Therefore saving = investment.” (GT, p. 63)

The comparison of (iii) and (iv) tells everybody that Keynes dealt with a zero profit economy. Because a zero profit economy is a NONENTITY the whole of the GT is proto-scientific garbage. Keynes, of course, never realized this, and neither did his dull followers up to the present, and neither did Barkley Rosser.

Conclusion: The formal foundations of macro are false since Keynes. All I=S/IS-LM models from Keynes/Hicks to Krugman#2 and all multiplier models#3 of the last 80 years are provably false.

Egmont Kakarot-Handtke

#1 Getting out of IS-LM = Getting out of despair
https://axecorg.blogspot.de/2016/06/getting-out-of-is-lm-getting-out-of.html

#2 Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2392856

#3 Advancing to the correct multiplier
https://axecorg.blogspot.de/2017/08/advancing-to-correct-multiplier.html

rosserjb@jmu.edu said...

Anonymous,

Sorry, but no, and I am not impressed by Stephen Cohen on this matter in the least. My wife's grandfather knew Bukharin very well. Lenin started it, and everybody knew that, and he supported it to his death. However, it did become Bukharin's. But do please keep in mind that Stalin supported it also, until he didn't. He could support pretty much anything he wanted after a certain point.

Sandwichman said...

Wallfly,

If there was an IP filter on this blogger, I would activate it to block Egmont. I looked but I couldn't find one. His comments are spam. The first few are fine, he's entitled to an opinion. But the endless repetition along with the name calling is not welcome.

Hear that, Egmont? FUCK OFF!

rosserjb@jmu.edu said...

Wallfly,

Just follow up on S-man's remarks, I generally oppose censorship unless one is just totally vile and irrelevant. For all his name-calling crankiness, Egmont does mostly post about economics, which he really does know quite a lot about, even if he tends to boringly repeat himself over and over. I once let him have his full blast on a thread on capital and profit some time ago, going on for over 100 comments. But I usually just reply to him once on a thread and leave it at that. He got more attention this time because Thornton Hall sort of took him seriously briefly, which led to more than usual comments by me in which I explained to Thornton the basic well-known problems with Egmont's standard stuff, which Egmont promptly demonstrated I was right by just spouting the same old stuff with apparently no idea how completely ridiculous he is making himself look.

But in the future, if others can avoid getting taken in by his nonsense, I shall continue to restrain myself to at most one reply to his first post on a thread. I do not wish to censor him, but I also do not like to go on and on with these repeated roundabouts of the same old silly stuff.

rosserjb@jmu.edu said...

Now that it is the actual bicentennial of the birthday of Karl Marx, I shall note that my wife's grandfather who was close to Bukharin paid dearly for that relationship. He was imprisoned by Stalin and spent many years in the gulag, losing his teeth and much more before he was finally released in the 1956 Khrushchev de-Stalinization clarification.

I shall also note here that my wife Marina was in her days in the former USSR someone who was allowed to see the banned works of Marx held in original texts in the Marxism-Leninism Institute in Moscow, which I think still exists, although in a run-down and underfunded status, where she got to read such forbidden texts as Marx's early philosophical manuscripts, as well as such scandalous materials at Marx's Pre-Capitalist Economic Formations.

AXEC / E.K-H said...

Barkley Rosser, Sandwichman

The complete macroeconomic Profit Law is given with
Q=Qm+Qn=Yd+I−Sm+(X−M)+(G−T)+Qn

All variables are measurable with the accuracy of two decimal places. So, the axiomatically#1 correct Profit Law is a testable proposition.

A scientist would first of all check whether the equation is logically and empirically true. The discussion about Capitalism and Socialism is absolutely senseless as long as the pivotal economic magnitude profit is not consistently defined and fully understood.

You, of course, are no scientists with the goal to figure out how the economy works but political agenda pushers who instead are preoccupied with the question of how best to suppress the unassailable proofs of your multidimensional incompetence.

The capitalist economy will break down for the same reason as the socialist economy, that is, because the Profit Law holds for ALL monetary economies independently of the definition of private/public property.#2

Marx got profit and exploitation and classes wrong.#3 His 200th birthday is the right date to bury him for good at the Cemetery for Failed/Fake Scientists.#4

Egmont Kakarot-Handtke

#1 The true macrofoundations which fully replace the false Walrasian microfoundations and the false Keynesian macrofoundations are shown on Wikimedia
https://commons.wikimedia.org/wiki/File:AXEC137.png

#2 Mathematical Proof of the Breakdown of Capitalism
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2375578

#3 Profit for Marxists
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2414301

#4 Why is economics a total scientific failure?
http://axecorg.blogspot.de/2018/05/why-is-economics-total-scientific.html

Anonymous said...

Rosser, you show your usual bs colors well. Just because your wife's grandfather knew Bukharin is meaningless. Lenin started NEP as a tactical maneuver, Bukharin developed it. But the entire point--which you seem to have missed--is that structural or institutional contradictions are not what did NEP in. It was high politics, not economics, in the end.

Please try to keep your ego in check. It tends to run rampant at times in these posts.

P.S. Cohen knew Bukharin's widow, I have spoken with people who have worked in archives relevant to Lenin, Bukhariun, NEP, ad infinitum. I work in those archives.

rosserjb@jmu.edu said...

Sorry, folks, but I shall reply one more time, here on Marx's bicentennial, but this will absolutely be it no matter what Egmont or anybody else posts.

As it is, Egmont, I am actually beginning to worry about you, our pet crank lunatic. Maybe you are really losing it, given how persistently you simply post almost the same thing over and over, even in the same thread, as you have done here. Have you stopped taking your meds, Egmont? I am genuinely concerned. Really.

On top of that, there is a minor variation in this latest post. You have added to both sides of the accounting identity an undefined Qn, which has not appeared in any of the other posts above. As it is on both sides of the accounting identity, it does not matter much, and I forget what it is supposed to be (please do not bother informing us), although I imagine it has popped up in numerous of your unpublished SSRN papers.

But the real bottom line for all your claims of having this great and true theory of profit is that is not at all a theory. It is a mere accounting identity, true by definition, even when we cannot accurately measure all its components (which we can't, although we can do pretty well). The funny thing is that with some of these things that are supposed to be accounting identities when we do as you suggest, in fact the measured supposed values usually do not add up properly, mostly because data really is noisy, although you have always tended to sneer at actual data or empirical tests of any sort because they are not theory, which is supreme in your world.

But, again, what you have is not theory, or even a theory. It is an accounting identity, true by definition, and thus explaining absolutely nothing. You claim that somehow stating this accounting identity proves that both the capitalist and socialist economy "will break down." But in fact you provide zero explanation of how your vacuous accounting identity shows either of those in any way, shape, or form. And, of course, for all the recessions and depressions the world capitalist economy has suffered through, it is still going and at the moment growing in nearly every nation it exists in, with no obvious sign that it is going to experience any sort of permanent breakdown any time soon, seen from here on Marx's 200th birthday, unless of course you define any downward movement of GDP (a recession) as constituting your predicted "breakdown."

That is the bottom line. Your accounting identity is not a theory and provides no theory for what you claim it does. Period.

rosserjb@jmu.edu said...

anne -onymous,

Oh dear, I thought we were being friendly these days, you even saying nice things about the book by my wife and me on comparative economics. I guess what has you all down on my case is my disagreeing with you on Lenin's role in the NEP, although I do not get why that is such a big deal. Cohen's account was a great scholarly breakthrough nearly a half century ago when it first came out, but it is now a bit out of date, even as on most issues I am in full accord with Cohen on most of this. And I have agreed with most of your points, including that it was ultimately "politics, politics, politics" that lay behind the ending of the NEP, with that line meaning that Stalin ended it so he could seize total power, even though the scissors crisis excuse may not have been as serious as claimed by him.

On the matter of Lenin and Bukharin and the NEP, I wrongly said Lenin died in 1923, but he lasted until Jan. 21, 1924, although basically out of active political action by some time in 1923. He was in full health and control in March, 1921 when he initiated the NEP. He converted Bukharin to it, not the other way around, and he remained in charge basically until his first stroke over a year later in May, 1922, after when Bukharin took charge and led both the political charge against Trotsky (with Stalin on his side) and on the theoretical side against E.V. Preobrazhensky, his former coauthor of the ABCs of Communism, when he was a hard leftist pro-super-industrialization drive guy. EVP was his theoretical opponent in the 1920s debates over teleology vs genetics. But, hey, you can read all about that in the book you have said nice things about.

rosserjb@jmu.edu said...

A bit more, anne. It is an open issue what Lenin's ultimate view of the NEP was. At some points he argued it as a tactical retreat in the face of famine (5 million dead) and the immediate matter of the Kronstadt sailor uprising put down very bloodily by Trotsky, especially when addressing leftist advocates of the previous Bukharin-Preobrazhensky hard industrialization line, while at other times he declared that the NEP was the "original Bolshevik economic program" (resembling that first stage of socialism as envisioned by our still bicentennial birthday guy, Karl Marx, as well as Dengist Chinese policy in the 1980s), that was pushed aside from by the civil war. In any case, he supported it as long as he lived, even though he was no longer in control of it after about a year after he put it in place and converted Bukharin into supporting it.

AXEC / E.K-H said...

Barkley Rosser

I wondered already a bit when you will come up with the most idiotic argument of all of economics. And here it is: “But the real bottom line for all your claims of having this great and true theory of profit is that is not at all a theory. It is a mere accounting identity …”

This argument features as item 17 on my comprehensive list of economists’ BS.#1

Your problem is that you do not know what a theory is and that you hallucinate that economic theory is about Human Nature/motives/behavior/action. This is the foundational blunder of standard economics as defined by Arrow: “It is a touchstone of accepted economics that all explanations must run in terms of the actions and reactions of individuals. Our behavior in judging economic research, in peer review of papers and research, and in promotions, includes the criterion that in principle the behavior we explain and the policies we propose are explicable in terms of individuals, not of other social categories.”

NO, economics is NOT about how humans behave#2 but about how the economic system behaves. Economic theory is about the properties of the monetary economy as a whole and the objective-structural relationships between the economic variables.

The core of structural relationships is given with what you and the rest of gossip economists falsely call accounting identities. When you look at the correct set of macroeconomic axioms#3 then you see that only the two nominal variables, i.e. Yw and C reappear in National Accounting. This is of overriding importance for later testing. The fatal flaw of standard economics is that it takes subjective concepts like utility into the premises and these have not been testable for 140+ years and will not be testable in all eternity. This is why economics has never risen above the level of motive speculation, storytelling, vacuous blather, folk psychology, and gossiping.

Accounting identities are the structural hardcore of all of economics. The two fundamental accounting identities are profit Q≡C−Yw and saving S≡Yw−C, that is, Q+S=0 or Q=−S. So, the elementary mathematics of accounting tells everybody that macroeconomic profit is in the most elementary case equal to dissaving, that is, the growth of household sector debt.

Economists, though, are too stupid for elementary mathematics and got macro accounting wrong. The epitome of incompetence is Keynes’ I=S. Yes, I=S is ‘merely’ an accounting identity but the point is that it is dead wrong, just like 2+2=5 is dead wrong. However, neither you nor the rest of cargo cult scientists has realized it since Keynes messed the accounting identities of macro up.#4

Because of this, Keynesian theory, Post-Keynesian theory, Modern Monetary Theory, the story of Lenin’s NEP and your wife’s Russian relatives is pure proto-scientific garbage.

Egmont Kakarot-Handtke

#1 Failed economics: The losers’ long list of lame excuses
https://axecorg.blogspot.de/2017/01/failed-economics-losers-long-list-of.html

#2 Overreach: Economists have their fingers in every pie except real economics
https://axecorg.blogspot.de/2018/04/overreach-economists-have-their-fingers.html

#3 (A1) Yw=WL wage income Yw is equal to wage rate W times working hours L, (A2) O=RL output O is equal to productivity R times working hours L, (A3) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.

#4 A crash course in macro accounting
https://axecorg.blogspot.de/2017/07/a-crash-course-in-macro-accounting.html

#5 Poor Schumpeter — abused as a testimonial for MMT
https://axecorg.blogspot.de/2018/05/poor-schumpeter-abused-as-testimonial.html

ANC Driver said...

As the global economy becomes more of the focus the real sources of profit will eventually have to become understood although it may send many a learned man to the depths of depression