Remarks by L. Randall Wray at “The Treaty of Versailles at 100: The Consequences of the Peace”, a conference at the Levy Economics Institute, Bard College, May 3, 2019.
I’m going to talk about war, not peace, in relation to our work on the Green New Deal—which I argue is the big MEOW—moral equivalent of war—and how we are going to pay for it. So I’m going to focus on Keynes’s 1940 book— How To Pay for the War—the war that followed the Economic Consequences of the Peace.
Our analysis (and the MMT approach in general) is in line with JM Keynes’s approach. Keynes rightly believed that war planning is not a financial challenge, but a real resource problem.
The issue was not how the British would pay for the war, but rather whether the country could produce enough output for the war effort while leaving enough production to satisfy civilian consumption.
DECEMBER 8, 2016.
THE CLOSING DATE FOR THE CROWDFUNDING CAMPAIGN FOR THE JMK WRITINGS PROJECT.
I thank, from the bottom of my heart, all those who have backed the campaign, with donations ranging from USD5 to USD1,000. Almost everyone has said complimentary things about the proposed edition (‘great idea’, ‘wonderful project’, ‘best of luck’ etc), but far fewer have followed up with contributions.
By L. Randall Wray
Here is a presentation that I’ll give today at the University of Denver at the annual J. Fagg Foster honors ceremony. Most of you will not know of Foster, but you should. While he did not publish much, he was the professor of a number of prominent institutionalists who attended DU in the early postwar period. I was lucky to have studied with his student, Marc Tool, and was introduced to Foster’s work at the very beginning of my studies of economics. My presentation below is based on two of Foster’s articles: J. Fagg Foster (1981) “Understandings and Misunderstandings of Keynesian Economics”, JEI, vol XV, No 4, p. 949-957.; and (1981) “The Reality of the Present and the Challenge of the Future”, JEI vol XV, No 4, p. 963-968. Both are from 1966, republished in a special issue of the Journal of Economic Issues, 1981. You should read them.
Is this the age of Keynes? That’s the question raised by Fagg Foster in 1966.
In the 1960s the answer seemed obvious. Keynes dominated economics—or, at least, macroeconomics—and Keynesianism dominated policy. And it worked! Or, so most thought.
Foster wasn’t sure. While he agreed that “[t]here probably has been no instance in history in which a pattern of ideas has had so much effect on the everyday life of everyone in so short a time”, he thought most of Keynes’s followers misunderstood his theory.
By Michael Hoexter, Ph.D.
[Part 1 is posted here; Part 2 is posted here; Part 3 is posted here]
The Anti-Keynes Revolt
Against the Keynesian consensus of the WWII era and afterwards, there remained marginalized economic schools that held to ideal notions about markets and remained convinced that a reliance on government was tantamount to a “Road to Serfdom” and ultimately led to Communism. The core of the neoliberal campaign, gathered around the Mt. Pelerin Society founded by economist/social philosopher Friedrich von Hayek, denied that government management of capitalism’s excesses was needed and that the price system and the market were pure, self-regulating entities which bring maximum prosperity and liberate the individual. Continue reading