By L. Randall Wray
Cross posted from Economonitor
Updated 01-10-2015: Added video links
I just returned from the annual ASSA meetings in Boston. This is largely a front for the American Economics Association to produce an appearance of pluralism. The ASSA is actually run by the AEA, which allocates to itself the prime locations and biggest conference rooms—and then offers a few slots and tiny rooms for most of the heterodox groups that also hold their annual meetings with the ASSA.
This is the closest economists come to a pornfest. As you walk by the typical AEA panel presentation, you’ll see a tiny audience in a darkened room, titillated by a powerpoint slide filled with obscene mathematics.
There are a few exceptions, namely the few slots allocated to heterodoxy. Most of these are crammed into hotel rooms that have had the twin beds removed and 25 folding chairs crammed into a space that could comfortably hold 8. However, there are a handful of special events that actually get decent digs.
I went to Boston mainly to interview for an opening we have at UMKC due to an unfortunate untimely loss of our internationally renowned scholar, Fred Lee.
However, I was also asked to say a few words at a special session for Lord Robert Skidelsky. I was more than happy to do this, as Lord Skidelsky has graciously accepted our invitations to give a series of keynotes at the bi-annual Post Keynesian conferences in Kansas City (most recently last September). You can see the conference website here. Click on videos to see talks by Lord Skidelsky as well as James Galbraith and Bruce Greenwald. It is worth noting that Lord Skidelsky provided the funding that made the website possible.
In any case, what follows is the short presentation I gave before a large audience.
Lord Robert Skidelsky ASSA 2015 Presentation by L. Randall Wray for Economists for Peace and Security (EPS) Annual Dinner in Honor of Robert Skidelsky
As everyone here knows, Lord Skidelsky wrote the 3 volume masterpiece biography of Keynes. But in some respects, his work after that is even more interesting.
I’ll begin with his book on the crisis, KEYNES: THE RETURN OF THE MASTER, which skewers orthodoxy while presenting a Keynesian explanation of what went wrong.
More importantly, he links all of this to Keynes’s ethics, morals, and early beliefs. The problem runs much deeper than a financial crisis. This is nothing less than a failure of Western Capitalism—an economic system based on immorality.
For Keynes, “good” behavior is not a self-seeking “rational” (in the neoclassical sense) endeavor, rather it is action that contributes to “good states of mind”.
Today’s problem is the “love of money” (“the root of all evil”) because it is morally and economically inefficient.
While the love of money drives capitalism, which helps to provide the required material comfort necessary to live “wisely, agreeably, and well”, it is also a neurosis because there can never be a point of satiation.
Orthodoxy completely ignores this neurotic love of money because it is irrational, yet, the mainstream approaches promote, nay, celebrate, unbridled wealth accumulation and even concentration of wealth and income that follow on.
The implications of this are taken up in the General Theory’s Chapter 24: the fetish for liquidity plus inequality generate chronic demand gaps and unemployment.
Skidelsky relates this to the current crisis: financialization has elevated the love of money as practically the only worthwhile pursuit: today “wealth increase is the only goal western society has to offer. Because its only goal is to make societies richer, capitalism has to be more successful than any rival economic system in order to survive.”
Skidelsky’s later book asks the question HOW MUCH IS ENOUGH?, and answers with a quote: “Nothing is enough for the man to whom enough is too little”.
For the Vampire Blood Sucking Squids of Wall Street, 99% of everything will never be enough for the One Percent.
When the Berlin Wall fell and the “free market” was embraced globally, it appeared that capitalism was triumphant. Yet, it destroyed communities, wrecked the environment, generated record inequalities, and fueled wars and terrorism.
And then it collapsed into a global crisis.
According to Skidelsky, the crisis highlights an institutional failure (“banks mutated from utilities into casinos”), an intellectual failure (economists advocated a dangerous view of the efficacy of markets), and a moral failure (“a system built on money values”, and “the worship of economic growth for its own sake”).
For some centuries we have accepted this immoral system because it “delivered the goods”. We tolerated, or even praised the neuroses of our capitalists because they gave us jobs so that we could produce the things that improved our lives.
But no one better epitomizes today’s capitalist than Mitt Romney the job destroyer.
I think it is time to restore Adam Smith’s evocative label: Today’s capitalist is the undertaker—the merchant of death–the Wall Street derivatives trader who profits betting on deaths of firms, governments, mortgages, and so-called peasants.
A hundred years from now, when someone—probably Chinese—writes the history of Western Capitalism, it will be the History of War undertaken to benefit undertakers.
The 100 Years War, World Wars, The War to End all War, Hot Wars, Cold Wars, the War on Poverty, the War on Drugs, The War on Terrorism.
War profits the profiteer while it increases the insecurity of the rest of us. That insecurity is good for the security apparatus. But it is a social and moral dead-end, fueling racism, jingoism, fear, and murders by cops of unarmed black men.
I share with Robert and Jamie a Chinese connection—as you know Robert was born in China, and Jamie and I have Chinese wives—and that might make me unjustifiably optimistic.
Perhaps there is an alternative to Western Capitalism; we are seeing successful experiments—in South America and in Asia—Capitalisms that offer other varieties of Minsky’s 51 varieties of capitalism with heavy state involvement but not based on war and money love that inevitably turns economic affairs over to Wall Street.
While far from perfect, these offer some hope that as Western Capitalism continues on its inevitable path to final destruction, we can look forward to improved and peaceful “economic possibilities for our grandchildren” as Keynes put it.
Or as Robert puts it, what we need is a system that promotes those human desires that are indeed desirable—not one that rewards humanity’s most destructive impulses.
The final comment I want to make is to recognize Robert’s generosity. He has graciously given his time to attend events like this one—and in recent years has participated in the last three Post Keynesian conferences at UMKC as well as Levy conferences.
He’s also been working through INET to promote teaching altertnative perspectives to economics.
Thank you, Robert, for all you have done to promote an alternative to orthodoxy.