Sanders Sweeps Clinton Trump Triumphs New Hampshire Primary

As of 12:06 a.m. the results in New Hampshire are as follows. In the Democratic party contest Bernie Sanders has secured a very decisive victory over Hillary Clinton wining 127,076 votes to Clinton’s 82,325, 60 % to 39 % with 85% of the votes counted. This is as Bernie Sanders stated in his victory speech “huge”.It guarantees that Senator Sanders with his impressive victory will be in the race a long time with a well funded enthusiastic well organized campaign with a growing army of volunteers. He now will have the time to flesh out the necessary details of his policy proposals to meet the criticisms from the Clinton team that his proposals are unrealistic and cannot be achieved.

Hillary Clinton’s team cannot help but be disappointed with their result and although the next few contests may be more advantageous for her more centrist politics she undoubtedly will seek to revamp her approach to counter the Sanders campaign.

On the Republican side the results are as follows. With 81 % of the votes counted Trump has 80,670 votes and 35% of the vote. Kasich 37,603 16 %; Cruz 26,665 11%; Bush 25,859 11 %; Rubio 24,480 11%; Christie 17,605 8 % ; Fiorina 9748 4 %; Carson 5311 2%. Anyway you cut it Trump has triumphed in New Hampshire. Bush has improved his standing considerably, Kasich even more so, Rubio has stumbled; Cruz has stalled but is still a major factor and Christie may well be out of the race.

Will Michael Bloomberg enter the race ? If he does his mostly socially liberal policy orientation combined with his business credentials will draw voters from both parties as well as independents and complicate considerably the outcome of the general election in the fall.

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Dixville Notch reports first results in New Hampshire primary: Two other northern villages Hart’s Location and Millsfield also vote at midnight.

Its an old tradition dating back to the early 1950s in the case of Dixville Notch and its not scientific but its a fun way to begin the reportage of the key New Hampshire primary. In Dixville there will be exactly ten voters and they will finish the job of voting and counting the vote shortly after midnight. In the other two villages the populations are equally small Millsfield has 23 people according to 2010 census data and Hart’s Location has 41 people. So the sample is very small, (New Hampshire has a population of 1.327 million) and absolutely unscientific. Nevertheless here are the results from Dixville Notch:

Hillary Clinton

Bernie Sanders 4

Donald Trump 2

Marco Rubio

Ted Cruz

John Kasich 3

Jeb Bush

Chris Christie

Ben Carson

Carly Fiorina

In Millsfield Cruz has received 9 votes Trump 3 Clinton 2 and Sanders 1 Six other votes were distributed one vote each among 6 of the 8 remaining candidates.

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Sanders Wins Virtual Tie with Clinton in Iowa;Cruz ahead of Trump and Rubio on Republican side; Will This Last ?

The Opening U.S. presidential primary in what promises to be an exciting race for political junkies took place in Iowa last night. There were a number of surprises at least for those who didn’t have their ear close to the ground and close to the grass roots in Iowa in each of the parties. The primary season picks up steam in February with three primaries in New Hampshire, Nevada and South Carolina and then super Tuesday at the beginning of March will see 11 states plus Americans abroad and for the Republicans American Samoa hold comparable events in the race to determine delegates to qualify for the respective conventions of the two warring parties in late July which will choose the respective presidential nominees for each party.Throughout the rest of March and following months the rest of the states follow suit. New York with 247 delegates is April 19, California with 475 is June 7,Pennsylvania 189 April 26 and Illinois 156 March 15. I have followed these primaries going all the way back to Adelai Stevenson Dwight Eisenhower days in the mid 1950s. They almost always were exciting contests that revealed a great deal about American democracy and the substantial role of the grass roots and the political establishment in the process of electing an American president. This year’s race is no exception.

On the Democratic side we now have a real horse race between two major figures in the Democratic party landscape , each of whom has had substantial experience in American electoral politics and the parliamentary process.Hilary Clinton has had a distinguished career in American politics that spans four decades. She is also in a position if she wins the nomination to become the first woman elected president of the U.S.No small accomplishment.

Sanders with his more radical message comes from a long history of civic engagement and electoral politics at the local and state level and his long career in Congress and more recently since 2006 Senatorial experience. He is most definitely on the left flank of American politics . But contrary to the conventional wisdom there has been a long history of such political engagement in American politics going back to Eugene Debs,who contested the Presidency five times and on one occasion in 1920 received close to a million votes running on the socialist party ticket.Indeed in the first part of the twentieth century socialist mayors and local politicians and members of state assemblies were found throughout a wide swath of the U.S.( see James Weinstein, The Decline of Socialism in America 1912-1925 ;, NYC:Vintage Books, Random House, 1969, Table 2 , pp. 116-118.See also George Mowry, The Era of Theodore Roosevelt and The Birth of Modern America 1900-1912,NYC:Harper and Row Torchbooks, 1958.) As Weinstein shows there were socialist politicians elected to office in more than 80 cities and twenty states between 1910 and 1920. 18 states elected socialist candidates to their state assembly over the same period. Furthermore there were socialist newspapers and periodicals in 37 states some 187 socialist papers and magazines in total.

More moderate centrist complex but populist politicians like Teddy Roosevelt and the Progressives were also a major force.FDR and his entourage were somewhat ambiguously on the left despite FDR's wealthy and more aristocratic background. The left suffered an historic defeat in the first part of the last century but they never totally disappeared from American life nor from its set of values. Whenever the wheel of circumstance turned to harsher times or unpopular foreign adventures and wars intervened they made their presence felt. Bernie Sanders is simply the latest and perhaps one of the most successful incarnation of these progressive forces. I expect him to continue to do very well in his campaign. Win or lose he definitely has changed the conversation on the Democratic side and clearly expresses the widespread resentment and dissatisfaction of millions of Americans about the unfair working conditions,low wages, inadequate health care despite Obama care and lack of sufficient opportunity for young people and the burden of college tuition.

He is very popular among the young and they now have a champion for their cause.He may well do much better than the pundits expect. He has enough funds donated by over three million Americans -average donation 27$- as he has proudly announced to stay in the race a long time. His growing army of volunteers suggests that as well. We shall see how well his radical message resonates in states like California, Michigan, Illinois, Minnesota, Wisconsin and New York.

On the Republican front despite Cruz's victory in Iowa over Trump it is far too soon to count Donald Trump out of the game. The pressure from Marco Rubio may well grow in certain states but I am not yet convinced that Cruz and Rubio will defeat Trump in more urbanized states than Iowa.So far smaller players like Jeb Bush may also surprise by much better showings than their poor showing in Iowa. The same though less likely is true of Rand Paul who is by far one of the most intelligent of the candidates.Hayekian libertarianism and foreign policy prudence make for a curious combination in presidential politics but Paul's critique of Trump and other foreign policy adventurers will interest some Republican voters.

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Market mayhem driven by irrational traders’ fear;Canada Needs to Increase fiscal stimulus

The last week on the global stock markets has been a case study in how prone to irrational mood swings the financial markets can be. The film The Big Short based on Michael Lewis’s book of the same name provides deep insight into the crazy and crazed world of the financial markets in the run up to the great real estate driven crash in the derivatives market and the broader market collapse that followed in 2007-2008. The market has swung close to a 1000 points on the Dow over a few days then swung back again by some 500 points on Thursday and Friday then swung back again down over 200 points today.

This bipolar reaction is supposedly driven by the slowdown in China and the collapse in world oil prices. Nymex and Brent crude prices have fallen to close to and just under the 30$ a barrel marker. Way down from their level las t year and substantially down from their levels last month. Undoubtedly the drop in prices is worrisome to some traders and banks and financial houses but the story isn’t all bad since cheaper energy supplies will give a boost to consumer potential spending on other products and services. China is an important market but what percentage of overall company profits and thereby the North American GDP is China anyway ? China accounts for about 128 billion US$ of total annual exports. Canada is a more important customer. Roughly 1/18th of the U.S. GDP is exported to China. So lets assume that exports to China falls by 10 % Indeed this may be an exaggerated projection since China is still growing by 7% a year. The ten percent decline in exports means that in the absence of any other developments the US GDP is impacted by a negative 50 basis points or 1/2 a percent. This is hardly a catastrophe. The Chinese slower rate of growth is driven by business cycle phenomena and will recover in time particularly if the Chinese stimulate their economy.So the North American stock market reaction is overplayed. How should Canada respond to the threat posed by very low oil prices and a speculator options driven low Canadian dollar?

It is a good thing that because of how the Liberal party campaigned on a moderate stimulus and the return of sensible counter cyclical fiscal policy it will not be difficult to maintain public support for accelerating and even expanding the program because of the challenges our economy now faces. It is of course true that we are a resourceful country with a highly skilled and well educated labour force, a strong tradition of technological and scientific innovation and entrepreneurship but also an extraordinary reservoir of natural resources that have played a huge role in the history of our country since the first days of the staple base in furs, fish and timber during the 17th 18th and nineteenth century. Yet at the same time we need where possible to diversify our export base and indeed our export dependency to ensure that we are less vulnerable to global price shifts.So as a general principle we need to expand the infrastructure program in terms of the total aggregate demand that it generates perhaps by tripling the amounts involved and subject to the constraints of good planning and practical implementation front end loading some of it to have the maximum sustained impact.

Part of the country’s infrastructure also includes pipelines that carefully and in an environmentally sound way should permit our resources to be distributed and refined to serve the entire country thereby lessening our dependence on imported oil and to bring our resources efficiently and ecologically to market. Lac Megantic showed us that rail transport is more dangerous.
(Note: I myself invest in the markets and have a small retirement account)

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Poli 610 course outline winter 2016 Macroeconomic policy after Keynes, Friedman and the crash of 2008 (under construction)

Pol. 610  Macro-economic policy-making after Keynes

Concordia University

winter 2016
Prof. H. Chorney tel. 848 2424 ext.2106 
e mail harold.chorney@concordia.ca
Office hours tba
This course is an intensive examination of macro-economic policy-making and macro-economic theory in the light of recent global developments, including the crisis and fraud in global financial markets, the sub prime mortgage market crisis, the accompanying collapse in asset backed commercial paper and the Keynesian backed recovery now underway, the possibility of a double dip recession and the recrudescence of monetarism, deficit hysteria and laissez-faire in certain circles. It examines in close detail the problems of inflation,deflation,public finance, unemployment, recession,depression, stagflation and economic growth and the financial markets in the light of the work of John Maynard Keynes and his interpreters, co-creators and supporters like Michal Kalecki , Joan Robinson, R.F.Kahn, J.K.Galbraith, Abba Lerner, Hyman Minsky, Robert Eisner, Paul Davidson on the one hand and Friedrich Von Hayek, Milton Friedman, Harry Johnson, David Laidler, Robert Lucas and their followers on the other hand, as well as the neo-classical synthesis that draws from both schools.
In addition, we shall examine certain aspects of the contemporary political economy and explore the bursting bubble in high technology in 2000 and the recent collapse of the financial markets, as well as the current turbulence over the collapse in world oil and commodity prices; aspects of globalization and their impact upon growth theory as well as,the elections of Barack Obama and Hillary Clinton’s and Bernie Sanders’ campaign for election against a Republican party that rejects Keynesian policy;the Canadian success of Justin Trudeau running on a moderate Keynesian platform and the challenges he faces;the  credit crisis, the recent revenge of the bond markets in Europe and the ECB and Greece and shifting attitudes in public opinion and policy towards Keynesian intervention and planning and away from strict laissez-faire. From 2008 a modest New Deal style Keynesian
intervention introduced by the Obama administration including substantial investment in infrastructure and reregulation of the banking, financial, energy and transportation sectors.This had stabilized the slump that followed the financial crash . Growth has now resumed although it is not yet robust and may now be threatened by global turbulence and policy error from the Federal Reserve.  Some doubts still remain among skeptics  that the recession is over and a double dip can be avoided. Nevertheless there is considerable evidence that Keynes is back and that his theories once brought up to date by innovations like quantitative easing or temporarily monetizing some of the debt(an innovation that I first proposed in detail a number of scholarly articles and monographs in the early 1980s and nineties, but whose roots lie in the work of John Maynard Keynes and his circle in the early 1930s -see  my papers on Keynes and the origins of quantitative easing and on the 75th anniversary of the General Theory posted  on this site in June 2011) are sound and are very effective in fighting recessions and reversing slumps. The dogma of the past twenty-five years that unregulated markets work best and are always rational is now partly eclipsed by both events and public opinion. The previous Canadian political party consensus on balanced budgets and fiscal prudence is now anachronistic in the light of events in the global economy.
The course includes an intensive examination of the economic, political and social thought of Keynes, the relationship between Keynes and Bloomsbury, the way in which his ideas were received, interpreted and applied and the revolution and then counterrevolution in thinking which his work provoked. The clash between Keynesianism and Milton Friedman’s monetarism is explored in detail. An attempt is made to present the rudiments of an alternative theory of macro-economic performance that is more consistent with contemporary reality and incorporates insights from both schools. Presentation is through lectures and seminars. Extensive reading is expected of all students.
The severe recessions of
the early 1980s and 1990s and the growing fear of deflation in the first years of the 21st century and the current shocks to global financial markets and national economies serve as the contemporary backdrop for the course. The controversies over the public sector debt and deficit,the use of surpluses, the neglect of infrastructure, full employment and the role of the state in modern capitalist society are thoroughly explored.
Texts and Basic readings and films. (All students should view the film The big short and several of the other documentary style films made about the crash. A good guide to them is available on Moyers and Company:Six films on the financial crisis Jan.27, 2012.( Text *)
 John Maynard Keynes, The General Theory of Employment, Interest
and Money *
Hassan Bougrine and Mario
Seccareccia  eds. Introducing macroeconomic analysis, Edmund Montgomery publications ltd. Toronto *
Richard Parker, John Kenneth Galbraith: his life, his economics , his politics.*
Athol Fitzgibbons, Keynes Vision * (several copies will be circulated among students )
Joseph Stiglitz, Freefall:Free Markets and the Sinking of the
Global Economy *, N.Y. : W.W.Norton, 2010
Peter Clarke, Keynes:the Rise, Fall, and Return of the 20th Century’s Most Influential Economist,
Paul Krugman, End This Depression Now.
 N.Y.Berlin&London:Bloomsbury Press, 2009.  *

Ben Bernanke,The Courage to Act:A Memoir of a Crisis and its Aftermath

David Wessel, In Fed We 
Trust: Ben Bernanke’s War on the Great Panic, How the Federal Reserve Became the Fourth Branch of Government, New York:Random House, Crown Business, 2009.
 Thomas Kuhn, The Structure of Scientific Revolutions
(recommended )
Harold Chorney, The
deficit papers *(available through me)
Haroldchorneypoliticaleconomist blog available on the internet
Haroldchorneyeconomist.com current blog on internet

Scott Patterson, The Quants:How a New Breed of Math Whizzesconquered Wall street and Nearly destroyed It

 Kevin Phillips, Bad
Money: Reckless Finance, Failed politics, and the Global Crisis of American Capitalism (Viking, 2008)
The Rotman School of
Management, The Finance Crisis and Rescue:what went wrong?why? what lessons can be learned? U of Toronto Press, 2008
  John Maynard Keynes, Essays in Persuasion (Reserve)
The
Economic Consequences of the Peace A Treatise of Money, Vol 1 & vol 2(Reserve)
Henry M. Paulson, Jr.On the brink: Inside the Race to Stop the
Collapse of the Global Financial System, N.Y. Grand central publishing, Hachette, 2010
Charles Kindleberger, Manias,Panics and Crashes:A History of Financial Crises,London:Macmillan,1978
Scott Patterson, The Quants:How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It, New York Crown business,2010.
Michael Lewis, The Big Short: Inside the Doomsday Machine, N.Y. :Norton, 2010.
Justin Fox, The myth of the rational market,A history of risk, reward and delusion on Wall  Street,N.Y. Harper, 2011.
Simon Johnson and James Kwak, 13 bankers: The Wall Street Takeover and the Next Financial Meltdown, New York :Vintage, 2011.
Gordon Brown, Beyond the crash:Overcoming the First Crisis
of Globalization, N.Y.,London, Toronto &Sidney, Free Press
 The General Theory and After: Preparation Vol.13,C.W. (R)       The General Theory and After: Defense and Development Vol.14 C.W.
(R)
The General Theory and After: A Supplement Vol.29 ( R )
Robert Skidelsky, John Maynard Keynes, Vols 1 & 2 &3 (R )
Donald Moggridge, Maynard Keynes: An Economist’s Biography (R )
Harold Chorney, Revisiting Deficit Hysteria in Labour/Le Travail Fall 2004 No.54, pp.245-258. * (available on internet) *
Harold Chorney, The Deficit and Debt Management: An Alternative to Monetarism * (Reserve)
Harold Chorney, After the Crash:Rediscovering Keynes and the Origins of Quantitative Easing paper presented to the Eastern Economics Association, New York,Feb. 27, 2011. (posted on this site June 3, 2011) *
Harold Chorney, John Maynard Keynes and the General Theory after 75 Years:Preface to a Presentation to the Canadian Economics Association Special Panel on” Reconsidering Keynes in a Time of Crisis” * (posted on this siteJune 3, 2011)
A.Fitzgibbons, Keynes’ Vision * (Reserve)
Brian Snowdon & Howard Vane eds. A Macroeconomics Reader (Reserve)
Timothy Lewis, In the long run We Are All Dead: The Canadian Turn to Fiscal Restraint 
 Joseph Stiglitz, Making Globalization Work (Reserve)
Joseph Stiglitz, Globalization and its Discontents(Reserve)
 Joseph Stiglitz, The Roaring Nineties(Reserve)
William D. Cohan, Money and Power:How Goldman Sachs Came to Rule the World
 Dean Baker, Gerald Epstein and Robert Pollin, Globalization and Progressive Economic Policy (Reserve)
Doug Henwood, Wall Street (Reserve)
 L.Randall Wray, Understanding Modern Money:The Key to Full Employment and Price Stability (Reserve)
James Macdonald, A free nation Deep in Debt (Reserve)
J.C.Gilbert, Keynes’s Impact on Monetary Economics
  Harry G.Johnson, Macroeconomic theory and monetary policy,
Chicago: Aldine publishing, 1972.
Axel Leijonhufvud,On Keynesian Economics and the Economics of
Keynes,London: Oxford University press, 1968.
Gilles Dostaler, Keynes et ses combats, Paris:Albin Michel, 2005. (Also available in a new English language edition)
G.Boismenu &G.Dostaler, eds. La Theorie générale et le keyésianisme, Montreal:ACFAS, 1987.
Other Key Works:
Hyman Minsky, John Maynard Keynes (N.Y.:McGraw Hill, 2008);                        Stabilizing an Unstable Economy(N.Y.:McGraw Hill, 2008);   Can it Happen again:Essays on Instability and Finance (Armonk, N.Y.: M.E.Sharpe, 1982);  R.Dimand, The Origins of the Keynesian Revolution;  Charles Hessian, John Maynard Keynes: A Personal Biography of the Man Who Revolutionized Capitalism and the Way We Live;  Roy Harrod,John Maynard Keynes;  A. Hansen, A Guide to Keynes;  Fausto Vicarelli, Keynes:The Instability of Capitalism;  Paul Davidson,Post Keynesian Macroeconomic Theory;  R.Allen & G.Rosenbluth,False Promises: The Failure Of Conservative Economics;  Lars Osberg & Pierre Fortin, Unnecessary Debts;  D.Drache & R.Boyer,States Against Markets: The Limits of Globalization;  Thomas Palley; Plenty of Nothing: The Downsizing of the American Dream and the Case for Structural Keynesianism;  Adrian Ham, Treasury Rules: Recurrent Themes in British Economic Policy;  James Rock, ed. Debt and the Twin Deficits Debate;  Warren Young,Interpreting Mr. Keynes: The IS LM Enigma;  Peter Clarke, The Keynesian Revolution in the Making;  A. Carabelli, On Keynes’ Method;   J.A.Trevithick, Involuntary Unemploment:Macroeconomics From a Keynesian Perspective;  A.Asimakopulos, Keynes’ General Theory and Accumulation;  Victoria Chick, Macroeconomics after Keynes;  David Colander & Dewey Daane eds. The Art of Monetary Policy  Maurice Lamontagne, Business Cycles in Canada;  Frank Hahn, Money and Inflation;  William Greer, Ethics and Uncertainty:The Economics of John Maynard Keynes and Frank H. Knight;  Lydia & Maynard eds. Polly Hill&Richard Keynes;  Jan Marsh, Bloomsbury Women: Distinct Figures in Life and Art;  Quentin Bell, Virginia Woolf:A Biography;  Frances Spalding, Vanessa Bell;  Leon Edel ,Bloomsbury;  G.E.Moore, Principia Ethica ; Armand Van Dormael,Bretton Woods:Birth of a Monetary system;  Allan Meltzer, A History of the Federal Reserve ; Milton Friedman & Anna Schwartz,A Monetary History of the United States;  Milton Friedman,Capitalism and Freedom;  Lanny Ebenstein, Milton Friedman . Milton and Rose Friedman, Two Lucky People; James Tobin, Full Employment and Growth:Further Keynesian Essays on Policy.
 Key Internet sites:  http://www.Statistics Canada; OECD; Eurostat; U.S. Bureau of Labour Statistics;Statistics Canada;The Federal Reserve,European Union;Henwood’s Site; New York TimesThe Financial Times.The Hayek list. The post-Keynesian list; The Wall Street Journal;
Evaluation: Students will be expected to make a presentation to the seminar, , complete a major paper and write a test.They will also be expected to be regular , informed and active members of the seminar. To be informed obliges one to do significant reading and attend the seminar regularly.  Presentation and participation – 20 % ;Essay – 40 %; Test – 40   % .
Topics Outline:
1. Introduction and Overview.Why study the work of Keynes ? Contemporary economic orthodoxy. New technology and the business cycle. Globalization. The return of intervention and planning post 9/11, the New Orleans effect.The crash and  financial crisis,the recovery its origins and prospects.Financial derivatives, the collapse of Wall Street and TARP.Canadian versus American conditions. Stimulus and deficit finance and deficit hysteria. The Republicans rediscover Hayek and Ayn Rand.
2. The macro-economic problem; The role of markets; laissez-faire and rational markets versus   economic regulation;Paul Volker’s critique of the new regulatory framework; the world of classical economics.The monetarist counter-revolution.The economics of full employment. Galbraith’s notions of countervailing power, the technostructure, corporate planning and the new industrial state.  The post modern age and the political economy of globalization and its impact upon policy making.An outline of an alternative model of market behaviour.OPEC and the theory of cartels.
3. Say’s law and the question of unemployment; the question of wage rigidity.The labour market clearing model. Wage flexibility, the natural rate of unemployment and inflation, the problem of aggregate demand.Aggregate supply.
4. Keynes before the General Theory:1. Keynes the quantity theorist;the Marshallian roots of Keynes. Keynes and Bloomsbury; The Economic Consequences of the Peace;
5. Keynes before the General Theory: 2 Keynes and G.E.Moore, The Tract and The Treatise; The Essay on Probability, The Economic Consequences of Mr.Churchill,   his liberal vision. Uncertainty.
6. The Fundamental Equations. the Treatise on money and the problem of inflation and unemployment. The death of inflation and the return of deflation? Cartels and futures markets and inflation.
7. The Great Depression, Keynes and the General Theory; Michal Kalecki .Uncertainty and the investment process; the role of speculation. the asset backed commercial paper crisis and the work of Hyman Minsky. The Canadian American reception of Keynes. The New Deal.
  8. The General Theory: towards a synthesis; Keynes versus
Hayek and the classics. Keynes and Shaw and Marx. The origins of quantitative easing. the Treasury view and bond market revenge.
 9. Neo-classical economics
and the bastardization of Keynes. Samuelson,Meade, Harrod, Timlin, Hicks and the IS -LM. The neo-classical synthesis and its vulnerabilities in the age of stagflation.
 10. Stagflation, the re-emergence of monetarism, the deficit and public finance, what to do with the surplus.Keynesian policy in a federal state.
11. Supply-side and rational expectations theory. The natural rate hypothesis. The natural rate of inflation versus the natural rate of unemployment.
12. Post -Keynesian theory and policy;New Keynesian theory; Canadian macro-economic policy since the war.Technology and economic growth. Can we banish the cycle ?

13. Rediscovering full employment.A look again at an alternative model to current orthodoxy.Integrating the natural rate of inflation, OPEC cartelization and interest rate policy. Capital versus current accounting in public finance. The conversion of the Bush Republicans to Keynesian technique and its impact upon policy making in the US. The Obama Democrats and the 787 billion dollar deficit financed stimulus. The Republican counter-attack and the conversion of the party back to Tea party fiscal conservatism;The Return of deficit hysteria. The Stiglitz- Krugman critique. the need for a second stimulus.The bond market.Harper’s cautious conversion to Keynesian deficits.  The road ahead.

Tentative presentation schedule:

Jan 19 HRC Tarp and the crash. Keynes in the era of globalization.The current crunch over falling oil prices and the Canadian dollar. policy responses.Deficit hysteria and stimulus.

Jan.26 Stasha Aspects of the macro-economic problem.The role of markets laissez faire and monetarism Globalization and post modernism. Apping, high tech and the dual labour market.

Feb 2. Adam Say’s law, the labour market clearing model and NAIRU and aggregate demand versus aggregate supply.

Feb.9. Jo Kim Keynes before the General theory.

Feb 16 Vanessa The treatise on money, the fundamental equations the problem of inflation and unemployment.

March 1 Andrea Hyman Minsky.

March 8 Justin Keynes shaw and Marx

March 15 Johanna QE Deficits and public finance Keynesian policy in a federal state.

March 22 Saba

March 29 George World Bank, IMF and Bretton woods

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Poli 349 winter 2016 course outline: The City and social and political theory (under construction)

Poli 349 AA (4645):Political and social theory and the city Course outline winter 2016
.Professor Harold Chorney
Thurs 6-8:15
Jan 6-April 12

Posted on Jan 2, 2016

This course focuses on the rise of the metropolis and its links to economic and technical change that underlay the beginnings of nineteenth and twentieth century industrial capitalism. The city has always played a central role in both conservative and radical social theory.The search for community and the overcoming of alienation and loneliness is at the heart of considerable social theory. The rise of mass society and its displacement of class society is also a central theme in much post modern literature and has a useful role to play in explaining the cultural and communicative nature of society in an increasingly globalized high tech world with an ever enlarging virtual reality.

We explore these themes by carefully examining the work of a number of writers from the nineteenth, twentieth and twenty first centuries.

The grade will be based upon a term essay due in class in the first week of March 50 % and a final test at the end of term.There is also an option to submit and present an artistic work which focuses on some aspect of the urban for a value of 20 % .In this case the essay will be worth 30 % and the final 50 %.

Texts: Harold Chorney, City of Dreams: Social Theory and the Urban Experience, Nelson Canada 1990. Lawrence Cahoone, editor From Modernism to Post Modernism.Blackwell publishing 2003.Selected chapters.(Other selected Readings tba)

Lecture topics:

1. Introduction and overview: the rise of cities and the search for community. Post modernism versus modernism.From Descartes to Derrida.

2. Alienation, class consciousness and urbanization: the work of Marx and Engels and Marx’s Hegelian roots.

3. Gemeinschaft versus Gesellschaft :the work of Ferdinand Toennies

4.Georg Simmel: the Metropolis and Mental Life.

5.Urbanization and anomie and the conscience collective: the work of Emile Durkheim .

6.Max Weber: Modernism and Disenchantment. The economy of cities.

7.The Chicago School , mass society and American mainstream urban sociology. The early roots of post modernism.

8. Georg Lukacs and the theory of reification.

9. Walter Benjamin and the Theory of Technical Reproduction.Benjamin and Baudelaire.

10. The Frankfurt School and the dialectic of enlightenment.Horkheimer and Adorno.

11. The phenomenology of the Urban:From social theory to public policy. Jacques Derrida, Merleau Ponty,Jean Paul Sartre, Hal Foster, Richard Rorty, Michel Foucault, Max Weber, Jurgen Habermas and Jean Baudrillard.

12. Toward a critical theory of urban policy and politics in the global metropolis.

Essay assignment:Write a 10-12 page essay on one of the following topics.Be sure that your essay is free of grammatical errors and has a bibliography and is properly footnoted . Use a manual of style like the University of Chicago or Harvard Manual in guiding your notes or footnotes and bibliography.

Essay topics: (Still under revision)

1.Explore modernism and post modernism as philosophical concepts and cultural movements. How are they usable in building a theory of social change in cities. Why is Marx a modernist and Benjamin more of a post modernist ?

2. Explore the work of Walter Benjamin in depth. How is it that he transcends political analysis and enters the realm of art and literature.

3. Select two writers in City of Dreams other than Benjamin and Marx and explore and compare their work.

4. Explain and analyze global metropolises . How does the phenomenology approach aid us in our understanding of a global metropolis ?

5. Use some of the theoretical perspectives developed in City of Dreams to analyze Montreal city politics in recent years.

6. Do an in depth analysis of the work of Jacques Derrida. Explain how it is the outgrowth of his rejection of Sartre’s conception of modernity.

7. How has modern technology facilitated the growth of community? Can the kind of community which this social media driven community has created be considered comparable to the community which writers like Toennies , Durkheim and Marx were searching for.

8. Explore the economic, philosophical and sociological aspects of Marx and Engels’ analysis of cities and capitalism. What if anything in their analysis is still relevant in the the 21st century.

Class notes:

A:Useful in conjunction with the lectures on Marx and the metropolis

1. The falling rate of profit. Major financial crises like the one we have just experienced and the tensions surrounding globalization raise fascinating questions about the structural problems of modern capitalism. In the nineteenth century and for much of the twentieth century many economists debated this question. Keynes was convinced that there was little value in returning to any debate that was wedded to the anachronistic labour theory of value. Instead, he approached the issue of crisis from the point of view of less than full employment aggregate demand and the failure of the classical labour market clearing mechanism to operate consistently to deliver full employment. The labour theory of value that originated in the work of David Ricardo and was built upon by Marx to develop his theory of crisis that was rooted in the tendency of the rate of profit to fall over time because of a tendency to increase the organic composition of capital, that is the ratio of embodied technology, physical plant and raw material that was a key ingredient in the production process. These increases were motivated by the entrepreneurial and corporate desire to increase labour productivity.If the productivity gains are large enough they can reverse the tendency for the profit rate to fall. This was the argument of Bortkiewicz .In a funny sort of way it is also the argument of those who argue that high end technological innovation will rescue the first world from the global outsourcing that is going on whereby production is being shifted from North America and West Europe to countries like China, India and Asia generally. The unresolved problem still remains that high end technology does not appear so far to generate enough jobs quickly enough to replace all those that are being lost due to outsourcing. In addition there is the very real problem of ensuring enough global effective aggregate demand to purchase all of the high end output generated by these high tech centres of activity. Keynes dismissed the labour theory of value as out of date controversializing, but members of his circle like Michal Kalecki were less certain. Even Keynes chose to use an hour’s employment of ordinary labour and the remuneration it received as his numeraire in the General Theory.(see ch.4 GT) Bortkiewicz and Bohm Bawerk in their work raised effective critiques of Marx’s doctrine, according to Sweezy, although Sweezy remained much more convinced that Bortkiewicz was closer to the truth than was Bohm Bawerk.( Bohm Bawerk, Karl Marx and the Close of his System, P.Sweezy editor, London , 1948; L.Bortkiewicz, “Value and price in the Marxian system” translated from “Archiv fur Socialwissenschaft und Sozialpolitik, ertrechnung und Preisrechnung in Marxschen System” Bd.xxlllHeft 1, 1906, International economic papers no.2.) Bortkiewicz argues that Marx was guilty of methodological inconsistencies and neglected the mathematical relation between the productivity of labour, dependent upon the organic composition of capital and the rate of surplus value.The rise in productivity may be such as to totally reverse any tendency for the rate of profit to fall. Roman Rosdolsky attempts not completely successfully to refute both Sweezy and Bortkiewicz and Keynes’s colleague, Cambridge economist Joan Robinson in their critique of the falling rate of profit in his work The Making of Marx’s Capital, (London, Pluto Press, 1980, pp.398-411). Meghnad Desai in Marxian Economic Theory, ( London, Gray Mills publishing , 1974) has pointed out that Michio Morishima (whose class I regularly attended at the L.S.E.) believed that it would be better to abandon the labour theory of value because of the very difficult technical complications requiring complex mathematics to resolve in order to transform values into prices.(See also Desai’s work Marx’s Revenge:The resurgence of Capitalism and the Death of Statist Socialism, London:Verso books 2004) Morishima wrote ” We conclude by suggesting to Marxian economists that they ought radically to change their attitude towards the labour theory of value. If it has to determine the amounts of labour which the techniques of production actually adopted in a capitalist economy require, directly and indirectly , in order to produce commodities, it is not a satisfactory theory at all.” M.Morishima, Marx’s economics, Cambridge University press, 1973 p.193. Paul Baran and Paul Sweezy attempted to do precisely that in their classic Monopoly Capital wherein they substituted the tendency for the surplus to rise and the problem of surplus absorption for the falling rate of profit.Piero Sraffa’s classic work The Production of Commodities by Means of Commodities:Prelude to a Critique of Economic Theory, 1960, Cambridge University press, demonstrates a workable mathematical method for assessing dated labour in terms of its contribution to the value and price of a commodity which makes a very key contribution to this debate. Sraffa demonstrates convincingly how prices and values vary with variations in the rate of profit. Sraffa was a friend and colleague of Keynes who Keynes had helped rescue from fascist Italy before the Second World War by helping him secure a position at Cambridge. Sweezy in his classic Theory of Capitalist Development reduces the falling rate of profit to the following striking formulation; p=s'(1-q) where p is the rate of profit and q the organic composition of capital i.e. c/c+v (Marx in Capital vol 2 defines it as c/v rather than as Sweezy defines it c/c+v )p.625 chapter 23, vol.2 Dutton, Everyman’s library edition, London&N.Y. translated by Eden and Cedar Paul, introduction by G.D.H. Cole. &vol.3 p.214 ch xlll, progress edition, 1966.) He arrives at this as follows. p= s/c+v = sv/v(c+v) = sc+sv -sc/v(c+v) = s(c+v)/v(c+v) – sc/v(c+v) = s/v – s/v times c/c+v =s/v(1-c/c+v) where c/c+v is the organic composition of capital, s/v =s’ the rate of surplus value and q is the organic composition of capital so p (the rate of profit) =s'(1-q) so that the greater is q the lower is the rate of profit.

(p.68)) We won’t be pursuing this controversy further in the course but those who wish to read further about it can consult the works cited above and also look at Ronald Meek, Studies in the Labour theory of Value, Jesse Schwartz, The Subtle Anatomy of Capitalism and M.Desai, Marx’s Revenge as well as Paul Mattick, Marx and Keynes. Desai who is a former teacher of mine who may now want to revise his assessment about the success of globalization in the light of recent events has an interesting chapter on Marx, Hayek and Keynes.You might also want to look at my conference paper which I presented to the association for heterodox economics in London in 2001 which is part of The Deficit Papers, The Theory of the Business cycle in Keynes, Hayek and Schumpter:What do we know in the Age of globalization ? David Harvey, Limits to Capital, Verso 2006 is also very accessible and useful in integrating spatial and urban issues from a radical geography perspective.

Perspectivism:One of the students brought up this approach in a previous year which is identified with Nietzsche’s view of the relativity of belief according to the perspective of the individual , as opposed to the objective circumstances of reality. You are right , of course, to suggest a close affinity between the views of the post moderns, relativism and those of Nietzsche. However, in City of Dreams I drew not upon Nietzsche but rather upon the phenomenology of Husserl, Merleau Ponty, Schutz, Mead and Berger and Luckmann among others, as well as my own observations about the metropolis and the work of Benjamin.Clearly the approaches are related.

Jurgen Habermas: for those interested in exploring the work of Jurgen Habermas and the culture of communications in more detail you can start by checking out the references in footnote 34 on pp.52-53. see also Harold Innis’s Bias of Communications. See also, Jurgen Habermas’s prolific writing for example: Knowledge and Human Interests; Toward a Rational Society;Legitimation Crisis(available on the internet)The Theory of Communicative Action; also Thomas McCarthy, The Critical Theory of Jurgen Habermas.

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Poli 489, 2016 the political economy of Inequality :course outline

Poli 489 Course outline (under construction)
Professor Harold Chorney
Wed. H634
1:15-4:00

The real estate bubble and the crash of 2007 -09 uncovered serious strains in the economic and social fabric of global capitalism. The recovery from what turned out to be the most serious recession since the great depression of the 1930s has been slower than hoped for and very uneven. In North America largely because the Fed reinforced the Keynesian fiscal stimulus with significant quantitative easing thereby ensuring appropriately low interest rates, the performance of the recovery has been more solid than in Europe where the European central bank and the European Union have both retarded the recovery by refusing until quite recently to use quantitative easing and stressing fiscal austerity rather than Keynesian policies. As a consequence European unemployment is still very high in a number of countries and Europe appears to be teetering on the edge of deflation and stagnation. But in addition to these negative features of the recovery, the crash and slow recovery laid bare the terrible and widening gap in socio-economic inequality as well as growing poverty in many countries. This course will focus on the issue of inequality and equity in a number of leading global economies in an effort to document the problem, analyse emerging trends and evaluate policy proposals and programs designed to counter it.

Texts: Thomas Piketty, Capital in the 21st century , 2014 The Belknap press of Harvard University, 2014 also available in the original French edition Le capital au XXIe siècle editions du Seuil.
Joseph Stiglitz, The Price of inequality, Norton, 2013.Robert Reich, Saving Capitalism For the Many, Not the Few, 2015:Alfred Knopf.

Additional readings:
Peter Clarke, Keynes:the rise, Fall and Return of the 20th Century’s Most Influential Economist
Joeseph Stiglitz interview with Lynn Parramore in Salon magazine.
http://www.salon.com/…/joseph_stiglitz_thomas_piketty_gets_income_inequality_ wrong_partner/‎
Meghnad Desai, Marx’s Revenge:The Resurgence of Capitalism and the Death of Statist Socialism, Verso. 2004.
Amartya Sen, Development as Freedom, anchor books, NYC, 1999.,
Ethan Kapstein, Sharing the Wealth,W.W. Norton, 1999.
Frank Stilwell, Political Economy:the Contest of Economic ideas, Oxford University Press, 2012.
John Kenneth Galbraith, The Economics of Innocent Fraud,Houghton Miflin,Boston&NYC, 2004
Helen Sasson, Between Friends, Perspectives on John Kenneth Galbraith Essays by Derek Bok, Carlos Fuentes, Peter Galbraith et al, Houghton Miflin , 1999.
James Galbraith, Created Unequal:The Crisis in American Pay,Twentieth Century fund, The Free Press,Simon&Schuster, 1999.
Samuel Hollander,Classical Economics,University of Toronto Press, 1992.
Alvin Finkel, Our Lives:Canada after 1945, James Lorimer&Company, 1997.
Robert Heilbroner, The Worldly Philosophers,Simon%Schuster, NYC, revised edition 1965.
Between Capitalism and Socialism:Essays in Political economics, Vintage,Random House, 1970
Robert Lekachman, Greed is Not Enough, Pantheon, NYC, 1982.
John Porter, The Vertical Mosaic, University of Toronto Press
Wallace Clement The Canadian Corporate Elite
A.A. Hunter, Class Tells:On Social Inequality in Canada, 1986
David Harvey, Limits to Capital,Verso, 2006.
Thorstein Veblen, The Theory of the Leisure Class,Macmillan, 1912,Mentor edition 1953.
C.W. Mills, Power,politics and People
Steve Keen, Debunking Economics, Zed books, U.K.2001,London&NYC.
H.Bougrine & Mario Seccareccia eds. Introducing Macroeconomic analysis,Edmund Montgomery, Toronto, 2010.
Adam Harmes, The Return of the State, Protestors, Power Brokers and the New Global Compromise, Douglas and McIntyre, Vancouver&Toronto, 2004.
Tony Cutler, Karel Williams&John Williams, Keynes, Beveridge and beyond, Routledge&Kegan Paul,London&NYC, 1986.

Students will be asked to consult the quality and financial press including The Wall Street Journal, The Financial Times, the Guardianthe New York Times and the Globe and Mail , Le Monde ,Le figaro, Liberation various issues and weekly during the course for relevant articles to the discussion.

Evaluation:
Each student will required to present a topic in class in combination with one other student 20 % and make available a short 2-3 page synopsis of the presentation to all students and to me. Complete a term essay 40 % and write a final test 40 %.

Course weekly topics:

1.Introduction and overview:

2.The ethical basis of Democracy and markets :Flaws at inception.R.H.Tawney and the Acquisitive society.C.B. Macpherson, Hobbes, Locke, Bentham and Mill, Arrow, Debreau and Sraffa, Marx’s critique.

3. Keynes, full employment and the Beveridge Welfare state.the neo-conservative epoch and the return of inequality.

4.The crash and the sudden growth of inequality as an issue.

5. From Veblen to Keynes to C.W.Mills to J.K.Galbraith; James Galbraith.

6. Thomas Piketty and Joseph Stiglitz

7. Piketty and Stiglitz continued Robert Reich

8 .Reich, Piketty and Stiglitz continued

9. The Canadian case an exception? Innis, Porter, Clement, Hunter,John Macionis global inequality; The American case :Michael Hout, Inequality by Design.

10. Marx, Ricardo,Malthus Keynes and the distribution question in age of globalization

11. Distribution and development :Amartya Sen

12. Distribution and the environment, carbon taxes, stable states, guaranteed annual incomes, GDP and trade issues.

13. Review and conclusion.

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