Sunday, December 17, 2017

Mark Blyth - Why People Vote for Those Who Work Against Their Best Interests

Absolutely superb lecture by Mark Blyth about why people are turning to populism. His answer to get people back to the center (but not neoliberalism, which is finished, he says -

. Free College education
. Subsidized Childcare
.Single payer Healthcare
.Corporate Reform of 'Shareholder Value' Culture
.Breaking Up Digital Monopolies

 This is European style social democracy in the old fashioned sense, i.e, not neoliberalism.

Mark Blyth explains what went wrong in the 1970's where inflation shot right up which was due to full employment policies of governments which meant workers could easily walk out and find better paid jobs so companies put their prices up to pay for the wage rises but then unions demanding more pay rises to keep up with the inflation. But later on Mark Blyth says it was noise, not policy, which was responsible for the inflation, in other words, down to chaos theory, I guess, which only occurred in the 1970's, but all present economic theory (neoclassical) is based on that blip, so now we have super low inflation and interests rates but savers and pension funds suffer.








10 comments:

Neil Wilson said...

But as usual he fails to address the issue of Keynesian pump priming and why it doesn't work.

I never understand this fascination with the Scandinavian model. They have 6%+ unemployment in Sweden.

Noah Way said...

Which is only about 1/2-1/3 real unemployment in the US. And those people aren't living in abject poverty struggling to get assistance that vilifies them at every turn.

WillORNG said...

Sweden has moved furthest from social democracy hence the creeping unemployment tolerance and silly stuff like deregulating public a.c..

WillORNG said...

a.c.. should read schooling.

Neil Wilson said...

The social democracy model *doesn't work*. It is still maintaining a buffer of unemployment to discipline wage growth. So really you are just cycling people around the gig jobs which undermines the minimum wage - people end up working 9 months and being unemployed 3 which lowers the wage over the year.

Apparently the middle class liberals think that is ok. Probably because it doesn't affect them.


Kaivey said...

'But as usual he fails to address the issue of Keynesian pump priming and why it doesn't work.'

That sounded like the 'Sound Money ' argument to me, Neil, but then you state that the Job Guarantee will work better. Which sounds good to me.

But anyway, why doesn't pumping money into the economy work?

andy blatchford said...

Kaivey because pump priming just targets aggregate demand instead of effective demand.

Pump priming will get you out of a recession but doesn't solve involuntary unemployment just minimises it for a while.

Matt Franko said...

You have the metaphor “pump priming!” from the moron libertarians who think they don’t need leading govt spending all the time... at some point non-govt “job creators!” are supposed to take over operation of the pump... after a short period of “priming!”.... they’re idiots...

Neil Wilson said...

"But anyway, why doesn't pumping money into the economy work?"

It's pro-cylical spatially. So you end up with hot spots and no mechanism to cool them down, and cold spots with no mechanism to warm them up.

There's a lot of excuses coming from the metro-liberals as to why the 1970s price spirals happened. An awful lot of handwaving from those who believe in Scandinavian style handouts. The reason is that they don't want to admit that it doesn't work, and that you can create a better system if you get the do-gooders out of the way completely. The metro-liberals require a client class to justify their own political existence. You don't need Robin Hood once you have the right to a living wage job. He's redundant.

Matt Franko said...

"The metro-liberals require a client class to justify their own political existence"

that's probably 95% of Christendom....