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Posts Tagged ‘Executive Order 6102’

The Trouble with Marxism (Part Two)

January 28, 2012 Leave a comment

The portion of the labor day that is socially necessary as a percentage of GDP

So, I got feedback from three people who, in one way or another, say they don’t understand my last post on my conversation with Andrew Kliman. One person posting on Reddit, complained it was too dense; another wondered if I was advocating a return to the gold standard; a third person, who I asked to read it and give me feedback, began to have difficulty with it about halfway through it. Specifically that person had difficulty understanding my discussion of the “transformation problem”.

This is three more examples of my “tin-ear”, which expressed itself in my disagreement with Andrew. I have not been able to explain “my point” in a way that is not abstract, or explain the relevancy of the various statements I make to real events within society. Part of this is because I am a “Marxist” in the same way I could be considered a “Darwinist” — I am not an expert on either. The theory makes sense to me, and I accept it as a reasonable explanation for how the world works.

But, if someone argued a eugenics distortion of Darwin, I could not argue against that person by quoting Darwin. And, if someone argued a Keynesian distortion of Marx, I probably could not argue back using quotes from Marx. Until recently I was more a leninist than a “Marxist”; having read a lot of Lenin, but little more of Marx himself than the Communist Manifesto. And, neither of them had I read for more than two decades.

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The Trouble with Marxism (Part One)

January 27, 2012 2 comments

Well, I have just about had enough of my conversation with The Andrew Kliman, so I thought I would try to assess what it accomplished instead.

My ‘tin-ear’ with Andrew began after a conversation with @skepoet on twitter about the odd divergence between gold and dollar measures of economic activity since the Great Depression of the 1930s. The dollar measure of US GDP has risen almost uninterrupted since the end of the contraction phase of the Great Depression; while the gold measure of GDP rose from 1934 to 1971, then fell until 1980, rose again from 1980 to 2001, and has been falling since.

Interesting enough, the gold measure of GDP exhibits a classic pattern of boom and bust typical of the economy prior to the Great Depression, but the dollar measure of GDP shows an almost disturbingly smooth continuous upward sweep, until the most recent difficulties of 2008. What I find most interesting about the two measures of economic activity is that, until 1933, both gold and the dollar measures of GDP exhibited the same behavior. However, this identical pattern broke down in 1934.

What accounts for this sudden divergence?

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III. Depression and devaluation

August 11, 2010 Leave a comment

We examined the difference between a depression and a recession, arguing that the former is a real contraction of economic activity, and the latter merely a contraction of monetary activity. We also examined the connection between the two forms of economic contraction, and discovered both historical and material links between them. Now, we will examine how recession emerges as a distinct and separate form of economic contraction by focusing on the relation between depression and currency devaluation.

The fact that the end of the Great Depression in 1933 and the beginning of the recovery is linked by economic studies to the  end of the gold standard and devaluation — not just in the United States, but in all industrialized countries — should raise a question in your mind.

What magical quality does devaluation possess to rejuvenate an economy?

The answer to that question is, “None”.

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