Keynes and the Crisis of Capitalism
ฝัง
- เผยแพร่เมื่อ 16 ธ.ค. 2010
- Speaker: Professor Lord Skidelsky
Chair: Professor Mary Kaldor
This event was recorded on 7 October 2009 in Old Theatre, Old Building
Robert Skidelsky is Emeritus Professor of Political Economy at the University of Warwick. His three-volume biography of the economist John Maynard Keynes (1983, 1992, 2000) received numerous prizes, including the Lionel Gelber Prize for International Relations and the Council on Foreign Relations Prize for International Relations. He is the author of The World After Communism (1995) (American edition called The Road from Serfdom). He was made a life peer in 1991, and was elected Fellow of the British Academy in 1994. This event celebrates his latest book, Keynes: The Return of the Master
This lecture offers invaluable insight into Keynes's achievement & continued relevance. The Keynesian idea that economists mask uncertainty with certain conventions sustaining effectively biased representations of rational conduct, recounted here by Skidelsky, will help furnish an essay I am writing on the idea of cultural and economic hegemony devised by Antonio Gramsci. I had no idea Keynes could help me talk about Gramsci until I saw this excellent lecture. Thanks, Libyan School of Economics!
I don't think i can dislike this enough.
Why?
samuraikid33 Just because of his support for government stimulation of the economy and his thoughts that spending is the driver of economic growth. I'm not looking to have some massive debate here, i just don't agree with the principles of his thinking.
okay
gentygenty And why not? Try not to say something without backing it up.
Mark Taylor Because his positions are obviously libertarian/ neoliberal. He still believes that the market will regulate itself and the state is the only origin of economic crises. Mininum wages, state regulations and a welfare state in general e.g. are therefore evil communism of course.
@chefadeech
Thanks for that! Really helps! Have anything useful to say or write?
Keynes was certainly brilliant. And yet, he failed to recognize the continued and growing power of landed interests in the modern, industrializing economies. Some of his contemporaries (such as Scott Nearing, John R. Commons and Harry Gunnison Brown in the United States) found sound analysis in Henry George's application of David Ricardo's "law of rent" to resource-laden and urban land as well as to agricultural lands. Without any deep analysis or explanation, Keynes simply asserted that rent was insignificant in modern economies. Did he not have access to statistics showing the rapid increase in location rental values in the worlds' cities. Land at the center of any city or town was valued by the square foot. The simple process of market capitalization occurred to convert annual rental values to a selling price for land. And, as George observed, this claim on wealth occurred with any expenditure of labor or capital goods on the part of the landowner/rentier. This blind spot by Keynes meant that he failed to call for changes in tax policy that would largely prevent credit-fueled and speculation driven property market cycles of boom and bust.
LOL
Very good. His Short Intro into Keynes book is also very good. Reading it I realized how misinformed and simply unknowledgable much of the commentators on TH-cam are on Keynes.
24:90 says everything about where we are today...
It's not a SCIENCE science, it's a social science. It is man made but not in every way. It is essentially the study of how people use resources (even the non-man made ones). So it's 50-50 IMO.
It's essentially a bunch of half-baked theories with best of them working only half a time and everyone disagreeing with everyone most of the time.
Economics need to be demoted to same rank that astrology has.
The argument from inside the fishbowl.
@Corrie Hilland You two are spamming an eight year old comment on an economics video? Really? Has pathetic reached levels unimagined?
@Knossos22 glad i could help! it is an honest miss understanding, the internet is a confusing place! have great day :)
Matter of fact Keynes was actually very fiscally conservative and said his ideas didn't apply at full employment. He criticized the communists in his pond analogy saying they valued the mud over the fish. But when it came to combating deflation he knew a fiscal stimulus would work, as can be historically demonstrated.
In “Occupying Chairlifts” a simple rule tweak on inheritance ends up changing the direction and purpose of modern human life! Here’s a fair way to transition forward to where we’re rewarded for cooperating and creating instead of competing and conquering.
It's something specific we can demand. If this isnt the best answer, at least we’re thinking about what might be. Are we really just this close to having it work right?
Oh yeah, it's a Ski movie! “Occupying Chairlifts” on TH-cam!
56mins "If you start cutting now, you're going to deepen the recession and therefore you shouldn't do it. You should allow spending to increase you probably need a further stimulus.... At least the Labour govt says its not going to cut now, which the Conservatives wanted to do and I think if the Conservatives were in power they wouldn't cut either. They couldn't take the political risk of cutting" 7th October 2009. Professor Lord Skidelsky, former Conservative MP 1992-1999.
Then kindly explain what the idea of a dept ceiling is
35:30: "Milton Friedman always described himself as a Keynesian, although some have forgotten". Really? That I never knew!
This guy talks so much falsehood and rubbish. I think my ears are bleeding...
+Michael Graney yeah I would've liked him to elaborate on that
"in one sense, we are all Keynesians now; in another, no one is a Keynesian any longer."
"We all use the Keynesian language and apparatus; none of us any longer accepts the initial Keynesian conclusions"
mises.org/library/milton-friedman-keynesian
Well, he did take Keynesianism and spin it on it's head. Instead of funds going towards trade schools, infrastructure programs, et al funding, you get Private Public Partnerships/ Private Finance Initiatives and other programs that publicize the debt, and privatizes the profits. Quantitative Easing... Yeah that's all Friedman and Hayek....
Yes because it is not correct. He was one of the greatest enemies of Keynes.
Government backed housing loans have been around nearly a hundred years. Look into the GI Bill, it saw to an enormous boom to housing and no bubble. A lot of things contributed to the housing bubble, but mostly the repeal of Glass-Stegall which was LESS gov involvement not MORE.
Fleas discussing ownership of the dog.
why would they lend out mortgages to people who cant afford them? not because of lack of risk, but because no matter what happened they knew the government would pay them money in order to stop them from failing. the banks knew the government wouldnt let them fail so they took huge risks in order to make as much profit as possible. so much risk infact that in a free market they would have failed leaving only creditable banks intact. but instead the gov gave away bailouts. crash = gov every time
Power and money receive all the credit as saviors and carry on with impunity.
You say the fex has savings accounts that save dollars they possess. But where does the possession of the dollars come from? Your writing is quite fancy and impressive but answer me a simple question before you get all philosophical/political on me. When the fed "creates" "prints" "add digital zeroes to a bank accoutn" does this or does this not debase the dollar and create inflation? If it does debase the dollar then I don't understand deficit spending; it's just not right.
I agree with you that oil is the reason, not the government. I used to work for the Federal gov I know how wasteful/inefficient it can be, and I was an econ major and econ is very biased against the gov. But I also know, from experience, the government can do some things better or more comprehensively than the private sector. It's a tradeoff though because gov has not profit motive = waste. Keynesianism is to counter deflation though, and IS NOT a big gov economic system.
Gordon Brown's most serious error is not recognizing the power of land markets to drive cycles of boom and bust. The evidence for these cycles is documented by British author Fred Harrison in his 2005 book, "Boom Bust: House Prices, Banking and the Depression of 2010". Keynes was also guilty of failing to see the growing importance of land markets, as the rents associated with urban land and of natural resource-laden land climbed and climbed in response to expanding aggregate demand and the almost low effective rate of taxation on the potential annual rental value of land and land-like assets (e.g., the broadcast spectrum).
His last point about Glass-Steagal is EXACTLY what Ron Paul argued before Congress at the time when the repeal came before Congress--that deregulation was fine as long as the taxpayer was not on the hook to guarantee against the levels of risk and uncertainty that the repeal would unleash. There's one thing he was very wrong about in this lecture--there were people who saw the collapse coming--Ron Paul, Steve Keen, Nouriel Roubini, to name a few.
EXACTELY, The Crimson7272. The stumbling block for centralism (i.e. socialism, tyranny, etc.) is this base reality. The fact that NO two people will argree on EVERYTHING frustrates the progressive, status ideology.
There are many brilliant individuals in the world that are educated beyond their intelligence.
Please name this methods. Is raising the debt celling one of this "methods"?
At the time, most Keynesian-leaning economists thought his interest rate moves were highly dubious, but in any case they came after the stock market crash (and so didn't contribute to that bubble), while the housing bubble was in full steam well before he slashed interest rates. Face it, the bubble was caused by an out-of-control private sector (lenders and borrowers) completely mispricing risk and over-leveraging.
Neo-classical economics, including Austrian, says you CAN predict the future using linear models, if you first ASSUME, as Austrians do and Neo-Classicals do, that Markets are an extrapolation of a Single Individual Consumer and a Single Business with a Single Commodity.
Mises and Rothbard writing is full of "the businessman" and "the consumer", each operating as rational and self-maximizing.
Neo-Classicals also assume a BARTER economy in which banks don't exist to create credit out of thin air.
I guess the concept of the debt ceiling is to get the government together to come up with a plan to reduce future borrowing because it is not sustainable. This is a good idea, the problem is that there are trade offs. The trade off essentially being higher unemployment.
What this conversation comes down to is whether you will rely on other people or if you will rely on yourself to get what you need. If people rely on themselves and not others capitalism should flourish, with good intentions, and good results. Unfortuently Americans, and the world alike, have become reliant on governments, and tricked to believe their capitalism is a FREE system, which is why it is failing...government control.
It is more like it is based on sociology, but it has much to do with ecology also : )
we have been down this road, which is called the road to serfdom. I admit that I don't know Keynes economic theory all that well, but I hear that he is in favor of spending. Spending is just fine as long as it's not ALL from credit. Deficit spending is like buying something you can't afford with your credit card. It eventually comes back to bite you. Keynes seems to think that spending, on anything, is the answer to everything. Spending is not a means to an end. Spend on products not programs.
Does anyone bother to examine how Keynes viewed stimulus only on the pretext that stagflation was impossible?
keynesian economics does seem to be rather incohesive.
What means "stimulate the economy" ? Stimulating the horse buggy industry? However, once the stimulus ends the industry cries for futrher "stimulus". The end of the story is, the economy ends in a "stimulus" twist AND in a debt twist to finance the stimulus.
The end is known as the "KEYNSIAN ENDPOINT"
He sounds a bit like Vince Cable - not his words, just his voice, even look to some extent.
Ironically, he has a PhD in Econ, and has similar views too.
Banks create money. So does govt.
Credit is ESSENTIAL for capitalism, but also leads to financial speculation.
Bank are not constrained by reserve balances.
A govt with a central bank and a sovereign non-convertible non-pegged non-fixed currency never "borrows" to finance spending, nor does tax revenue fuel spending. The "national debt" is nothing more than savings accounts on the Fed's computers where countries and others save Dollars they possess, in the form of Bonds helpfully provided.
qatar has a population of less then 2 million and is run on oil reserves. high GDP is good but if you look at the economic state before the discovery of oil their main export was pearls and fish. it wasnt the "great blessing of government control" that led to the countries prosperity, it was oil. if you look at the united states more government control just leads to less competition which in turn hurts the consumer
Prices aren't sticky. This is a misunderstanding of prices as objective factors. Prices are at least in their origin subjective values. Trying to measure "stickyness" is like arguing how many angels can dance on the head of a pin.
Read Minsky.
this lecture had more to do with stand-up comedy and less with economics or with economics's history. 14:47 resumes it all
It really doesn't in a depressed economy.
Please add Turkish subtitles to this helpful video.
i'll save you time, all he says is bullshit
@Knossos22 capitalism and keynesism are not synonyms
"The relevance of Keynes today" is that we need examples of wrong-headed theories (like Keynesian-ism") so we can contrast it with real economics (Austrian economics).
of course forcing people to pay for others debt is the fastest way to overcome deflation. deflation was caused by the banks giving out loans to anyone making the economy (for a short term) rise. banks did this because the glass steagall act was repealed meaning commercial and investments banks could merge AND the money was insured by government. i have already explained why the housing market crashed and it was purely because the gov refused to leave the banking system free
I'd be happy to debate you. What do you think we Austrians are missing? I'll say from the outset that while Keynes is technically an economist his ideas aren't scientific. Keynes didn't even understand that economics is science; the study of natural phenomenon and NOT design. Beyond fundamental flaws in quasi-nihilistic epistemology and historicist methodology Keynes also couldn't "think" like an economist. He didn't understand opportunity cost, value theory, or the price system.
The debt ceiling is permission to pay back the money you already owe. Not permission to ask for more money. FYI technically not constitutional I have no idea why we do it the government is required to honor its loan.
Not if you follow Keyne's actual methods of moderating the business cycle during the boom as well as the bust.
The debt ceiling doesn't give the government permission to borrow more money, it gives the government the permission to pay back the money its already borrowed.
Of course it is scientific.
The government DOES NOT print all our money. OK, the Tsy-Engraving actually prints, but you mean "create" money. Most is electronic money. Private banks create most money as deposits. Govt creates what Govt spends.
Besides that, banks and corporations create Securities, Derivatives, and store Gift Cards. The issue is that those are not 100% fungible everywhere. You can't buy food with a Security or fuel with a Starbucks card. Only the basic legal currency is acceptable everywhere.
sorry so late
microeconmomics is a science. The Laboratory for economics is a fairly normal part of economics now. And economists like Vernon Smith, have been awarded the nobel prize for his experimental Econ.
There are few modern economist , me included, who take Adam Smith seriously
The economic progressives have been soundly defeated by Hyak, Milton Friedman Vernon Smith ETC....Economists don't think much of progressives OR about them
@vanderbiltst it is the over all consensus that america declining. As it has been declining, more government regulation has been added to "fix" these "problems", and the U.S. continues to not improve. some signs of this are the national debt, increasing costs, and increasing unemployment. Logic should point out that the problem is not in the people being incapable of acquiring enough government issued notes, but that our government is printing all of our money
Analyse the word Democracy. What is the it's formal definition?"Democracy is a form of GOVERNMENT". So Small Government = Ineffective/Impotent (Not able to assert the will of, and the interests of the Demos (People)) = Not able to act independently. Today, real democracy exists in a very very few places. In my opinion exists only in the Scandinavian Countries. All have a robust manufacturing industry (why Germany, Australia, and Scandinavian countries kept manufacturing profitably).
Adam Smith and ALL the classical economists were aiming for equal distribution of wealth, roughly not absolutely, in contrast to the Feudal and Mercantilist systems controlled by Royalty and Bloodlines. Correcting vast in-equality of wealth and income was seen as essential for Liberty as envisioned by Classical Liberal economists.
Austrian and Neo-Classical has overtly rejected the core principles of "Founding Fathers", not merely details. Of course econ disaster is widespread.
So if Fannie and Freddie are buying up mortgages sight unseen on the secondary market, what effect might that have on lending standards?
To say that the government was not pushing for an increase in home ownership, and everything that follows after that is either ignorant or disingenuous. They made no bones about this.
Funny that you are calling someone else an ideologue, as I'm sure you think yourself completely objective.
When has the world ever seen a pure capitalist economy or a pure socialized economy? I argue never, what we have seen is a variety of countries with a "mixed economy" but never all the way left or right. There are countries like Qatar, where the country has the highest GDP per capita and the fastest growing economy estimated for the next 10 years. And guess what? Most of the economy is in government control.
Sooo misleading. Chicago/Austrian Economics WANT booms and busts, Keynes doesn't. And Greenspan is far from Austrian economist (Austrians don't want a central bank or a monopolized currency)
You are still missing my point. Where did the money come from? It came from artifically low interest rates. Without that cheap money there in the first place, the lenders and borrowers wouldn;t have had the opportunity to overextend themselves the way they did. The nation was using their house as an asset,and not only an asset, but an income source. They woudn't have been able to acquire the majority of these homes without the gov't guarentees. You're continuing to look at the symptoms.
Nice man
the ultimate philosophy of Austrians is to leave it up to fate? Um, no. The basic philosophhy of Austrians is that the free market works very well because it serves the most amount of people while also having the strictest guidelines. All free market capitalists believe in property rights, and the law of fraud, so that pretty much takes care of anybody overstepping their bounds in the capitalist society. Dont u get it, things only get messed up when there is intervention in the marketplace.
so if you take away freedom to choose, then everything works perfect. like a machine. makes sense. too bad i like eating chocolate ice cream instead of vanilla. too bad i like a honda instead of a ford.
the problem with socialism or a controlled economy is that in order for it to be fair to everyone, everyone would have to have the same tastes, same likes and dislikes, and same idea of what is fair and not fair. that is impossible. name one socialist economy that hasnt failed.
good luck
Are u serious? Rising the dept ceiling from 15 $T to 16 $T is not more borrowing? I guess this is Keysian thinking
are we in the long run yet??
Are you effing serious? Blaming Chicago school of economics? Yeahh their theories are solid IF the government didnt guarantee bank's loses. There was never any free market, only the illusion of free market. Free market = Risk AND Reward, not just reward reward reward with losses being guaranteed.
I see. How did 1929 happen?
The theories of the Chicago School would be more descriptive of the real world if most of the economists who fall into this school had listened closely to Milton Friedman on taxation. Friedman embraced the analysis of Henry George, who called for the public capture of the rent of land -- and nothing else to pay for public goods and services.
A more important fallacy than "the excluded middle" lies in Prof. Skidelsky's assumption that the intellectual failure of the dominant economists was independent of the influence of the power of the practical men of business. How easily the influence of what gets the approbation of the powerful infiltrates the hallowed halls of academia is not accounted. How tenuous the intellectual honesty of deans and professors dependent on the financial endowments by the industrialists of the late 19th and early 20th century is not considered. Were Marx and other socialist critics of capitalism without traction in the citadel of capitalism solely on intellectual grounds? I don't think so, and in our own time I find the confession by Alan Greenspan of the collapsing edifice his thought highly to his personal advantage: far better to be thought of as having erred intellectually than to have allowed the bubble to grow to bursting because he care only to please the practical men of banking who enriched themselves and their institutions from the high fees the bubble was generating. In other words, I don't credit Greenspan with intellectual honesty nor with honesty as a public servant and citizen. I think him a fraud, and I think his mentor, the leading light of the Chicago school, Milton Friedman, was an even greater fraud.
if you just wrote that last sentence i would've understood the rest.
@@tntramzy12 If I have been too expansive, I learned the fault from the professors of economics on youtube.
If you think that achieving a stable economic plan, without a major recession in almost 35years (1945-1980) is idiotic? Creating a robust enough economic model that managed to create the richest society (person getting $600,000 pays $170,000 less in taxes today compared to 1973. Whereas , tax for those earning $25,000 went up by around $900, as the idiots went out of favor).
Keynes do not know how to use Capitalism, Keynes don't know anything always steeling form the future!!
Well, that's not even an assertion, just ya-boo babyish name calling
You don't even know what the debt ceiling is do you?
You are only repeating misinformation put out by ideologues. I encourage you to look at the data. Fannie and Freddie were only responsible for a small fraction of all subprime lending, and only got involved well after the rest of the private sector had already been lending unscrupulously hand over fist. And who pushed them to take on these bad loans? Their shareholders, not the government! Also, you should look at the default rate for GSE mortgages versus private sector mortgages.
His followers are not ignorant, they just disagre with you. You probably need a bit more humility along with better empathy toward those you argue with. It'll serve you well, and decrease the swear words.
"CETERIS NON PARIBUS"
The ultimate philosophy of the Austrian is an archaic, vaguely Christian belief in fate, the supremacy of natural law, the limits of man and the inevitability of catastrophe. The Keynesian on the other hand believes the opposite: that man can shape his own destiny and that 'nature' is not self-regulating.
Capitalism is by and large a failed system of social provision that has staggered from crisis to crisis like a zombie on the public life support of military spending for the 75 years now, but as reason does not prevail in the world of utopian capitalism why face reality? Economics offers us an opportunity to hold the government responsible. I cannot think there is an economist on this planet who does not recognize the fact that if the government did not exist it would be necessary to invent it. Capitalism without a government would be like a bird without feathers.
We don't have capitalism. Haven't for over a century.
What we have not had in over a century is chattel slavery much to the displeasure of the patriarchs. Capitalism cannot tolerate equality but does not work any better on a plantation than it does under a dictatorship running sweatshops. Despite what generations have done to subsidize it, the free market is a model of inefficiency, waste and environmental degradation. Capitalism works no better now than it did before the industrial revolution under a regime of share cropping and peonage. Now, we are being promised yet another regime, that requires the working poor be stripped of popular sovereignty, so that their new masters can exercise with uncontested authority the right to confiscate the riches produced by the labor of people whose children go without food and medical care. Capitalism has undergone at least three name changes in the past century and has hidden its character behind the propoganda of progress at every stage and now as it enters the final stages of its decline its best defense rests on a vain effort to become invisible, by pretending it does not exist but still beckons as a distant utopia of smoke and mirrors somewhere on the horizon. The system's ability to reinvent itself is its real genius but I suspect that history has finally caught up with it. Like any other Ponzi Scheme the guys who run it will periodically have to skip town.That is why the free market sounds so much like an alias, because in fact it is.
luvcheney1 A hungry man isn't free.
You have a point. By the same token, I doubt you can show me a publicly recognized libertarian who advocates dismantling the prison system or denying police the use of lethal ammunition? Despite libertarians lip service to non violence, their acceptance of the apparatus of political repression is obvious. The threat of hunger remains the primary means available to sustain inequality and the free market to coerce the working majority into compliance.
Some of them do advocate dismantling those institutions to be fair - they believe private security forces paid for by the wealthy and accountable to nobody would be preferable. These are smart and serious people.
Absolute nonsense from Prof Lord Skidelsky: that "at the root of the crisis (2008) was not the failure of character or competence but the failure of ideas." His view is much like blaming a theft not on the greed and ruthlessness of a thief but on the idea that we are a society of people all committed to the Golden Rule.
He cites as evidence for his view the confession by Alan Greenspan that he was wrong in relying on his "intellectual edifice" - Chicago economics - to correct the excesses of the "free market", as if it was Greenspan's shyness to exercise his authority as Fed Chairman that caused the banking collapse. It may be true that if Greenspan had stepped in decisively when banks were buying securitized mortgages on the assurances of the prostituted rating agencies and forbade such investments, that the crisis could have been averted or at least mitigated; and while that may be true, it was not the failure of the ideas of the bankers and the lenders that caused the crisis. No! Skidelsky should know that it was the fraudulent lenders and mortgage securitizers, and the dishonest rating agencies that allowed the greatest bank robberies of all times to occur. Greenspan himself could not have been unaware of what was happening. I think his guilt runs deeper than too much faith in Hayek and Friedman.
Even the failure of the ideas of self-regulating markets is not an intellectual failure. It was a poorly founded idea to begin with and constructed by the oligarchy's academies to undermine Keynes's General Theory. The criticisms of Keynes do not refer to particular assertions of his General Theory. They are most often ad hominem attacks: "He (Keynes) did not understand economics (according to Hayek)."
The crisis of 2008 is still with us, magnified by the immense growth that the fraudulent banks were since allowed to achieve. The piper has not yet been paid.
ughhhh. I'm going to go back to austrian economics. This sounds like crap to me!
You are just like the dog of Proverbs. "As a dog returns to his own vomit so a fool returneth to his folly.
What a bunch of nonsens.
fed*
Oh god... 20:40 "Shocked economies need some sort of stimulus to come back to life", yet more bullshit. Gonna stop listening to this cause its crazy. He basically just said that every every economy that hasnt done "stimulus" in a depression(all except for recent years), which would mean that every single depression was a great depression. But that isnt history. Theres the GD(Where Hoover and FDR 'stimulated' excessively),and Japans 20 year 'lost decade'. And todays much greater Great Depression!
thoughtful guy, but also ignorant at times. i.e a dangerous guy. "a lot of the deficit will disappear" bla bla
I wish someone would stop him and let him know that Chicago is pronounced shi-CAH-go and not tchi-CAH-go
Economists, Academics, and Policy Makers are all too highly paid, so that they don't understand the marginalized lifestyle. They should swap it every now and then, so that they can be realistic and come up with workable practical solutions. Introduce heavier Property and Inheritance tax. Create jobs with the gov's reducing bureaucracy. Reintroduce fixed currency exchange system. Abolish floating currency exchange market. Stop allowing tax concessions to financial market investors. Loss has to be taxed, too.
True, because Marx was right all along.
dead wrong. If you borrow you must pay back. Debt ceiling comes into the play if you borrow more debt
watch this:
watch?v=tj99yDMYmbg
Isnt it great?
This is a pathetic lecture.