Right wing economics is a lot like a primitive cult

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Please note that I never included hedge fund managers or other manipulators of debt certificates in my list of producers. Our complex economy makes simple barter practically impossible so we must use money. Where there is money and credit there will be those who manipulate it to their benefit. It is one of the infellicities of modern complex economic systems.

ruveyn

You need peoples to consuming the production, and for that you need well distributed wealth. According to econophysic, (A discipline that apply mathematical models from physic.) the best way to having well distributed wealth you need to have low risks in financial investments and income tax redistributed to greatest number of peoples. The raising of inequality those last years is then the logical results of high riks financial investments, the lower of tax for wealthy and the use of govnerment money for making war.

Rationallity show that we should have liberal views on economy, of course the economists won't listen to such a heresy.

More accurately Mankiw is a new-keynesian not a neo-keynesian. Not that it changes too much.


http://en.wikipedia.org/wiki/Neo-Keynesian_economics

http://en.wikipedia.org/wiki/New_Keynesian_economics


I used to dig into history of economic thought!

Sorry, I was just being sloppy. My real point was just that he was some form of Keynesian.

Indeed. Socialists have science on their side. Socialism is more efficient, is more scientific, is superior. There is no voodoo involved in it. Sellers need buyers. This idea that you give everything to the sellers and the prices will fall to equilibrium doesn't seem to take into account that this equilibrium may be one with very little production at all - just enough for the sellers to do well. If the point is to have production then it's a complete failure!

By the way, by socialism I don't mean a command economy. Command economies are run through supply side principles where the government decides to supply more of x y and z and sets the prices and sets the wages - they don't try to induce production by increasing wages and demand, they just decide to produce more and make it available. They usually end up being austere and say that such and such is frivolous, put resources in things that enhance national power.

Not it isn't.


Not it isn't.


No it isn't.


So by "socialism" you mean some undescribed system that is counter to every historical definition of the term.

Yeah xenon, you just have no idea what you're talking about, and it shows.

Um.... actually the idea of supporting suppliers in the supply-demand diagram isn't causing "prices to fall to equilibrium" as that is assumed regardless of what the government does in a stable economy. (well, roughly, at least) The real issue is actually promoting a right-ward shift in the supply-curve, such that quantity supplied increases and cost decreases, or basically, the economy grows.


That's kind of what socialism has tended to mean. Not necessarily "command" but at the least, the notion that supply will be controlled by a certain class of society or all members of society, which is usually conceived of in a manner that is command.

Honestly though, I don't think that command emphasizes supply more than demand or that talk of that makes much sense. Command economies control both supply AND demand, and maybe they didn't manage demand as well as they should have, but the idea was to manage the economic variables.

Demand-side economics is far superior to supply-side economics. Of that there is no doubt.

Last edited by xenon13 on 31 Jul 2010, 12:42 pm, edited 1 time in total.

Demand-side economics is far superior to supply-side economics. Of that there is no doubt.

Equilibria were achieved in history with the vast masses of people living in abject poverty and a small upper class doing very well and controlling everything. Supply-side economics that is not a command economy will inevitably lead to this (it can be argued that command economies also have this problem - which is one reason that there isn't much in the way of good consumer goods for most people in a place like North Korea). There is no reason to produce more because the poor majority are irrelevent. Cheaper to pay them slave wages and make profits for the controlling class than it is to expand production so that these people can live better. For one thing those people will become less disciplined and that will never do. Why, society would fall apart!

Socialism in the west has meant demand-side economics. Even having workers with some share of control over the means of production means that they get a bigger share of the proceeds and this means higher demand.

Throwing most of the population away to struggle for subsistence really is efficient. How many people who could make valuable contributions are wasted away in slums struggling for survival in a Social Darwinist setting because the holy market economy decrees that they must do this? If this is efficiency then obviously the goal is an unworthy one.

The right wing is motivated by superstition and match box cover morality and the left wing is motivated by science and by what works, and that is the truth. The thing that blocks the left wing of course is what they say about politics - 'The art of the possible' and the plutocracy is very good at blocking good policies so it can gorge itself further. When the Soviet Union existed it was forced to compromise and the result was a golden age. Now that it can have things its own way we are headed for a dark age.

Either the state has power or the corporations have power, either way, don't expect them to to care about you at all. People with lots of money or power really don't care about the poor, they just don't.

I don't consider myself cynical, I'm just distrusting of anyone with power or money.

xenon, are you an example of the left-wing? I am just curious, as you seem quite superstitious and to hold to a match-box cover morality, and through this have turned reality into a dualistic black and white morality play. Somehow, I don't find this to be a scientific analysis, but rather dripping with "holy conviction".

What the right wing seems to ignore is that when the country is at it's economic height, organized labor is strong, workers are paid well enough to achieve middle class standing - and still have a surplus of cash, while the supply end is at a seeming disadvantage - but makes a barrel of cash, because everyone else is so well off. I believe a big part of supply side economics is a resentment for the demand side. For the right, it's just a matter of taking back power, and the well being of the majority be damned.

I think that he is right. Since the 1970s the median income in United States has remained the same. That means that the income of the average joe remained the same while all the growth went to the rich and the super rich. In fact the situation is worse now if you consider that most of the families have to rely on both wage earners to get that same income while in the 70s there were less women in the work force.

Wedge, your answer doesn't distinguish between policy choices or economic changes, as just saying "X changed" doesn't tell us why X changed at all. The story that I've often heard is that the real issue is actually cross-national changes in the workings of the economy, and that the US ends up having wage decline and stagnation due to the laissez-fair labor policies taken in the US, while European nations generally show signs of increases in unemployment during the same time period due to their more robust labor-market policies. I wish I remember the paper I read in my International Trade class on this issue, but the name escapes me, however, for anybody making this explanation, it seems necessary to make a more nuanced case with identified mechanisms and more complete explanations, as otherwise all you speak from is your political ideology.

Demand, per se, does not invent anything. In order for there to be a Demand Side, there must first be a Supply Side.

ruveyn