Obama wins decisive but narrow victory in both popular vote and electoral college.

Posted on November 11, 2012 by haroldchorneyeconomist

This past week’s American election marks an important historical turning point. A broadly based multi-cultural multi-lingual diverse lifestyle progressive 21st century  coalition won a narrow but decisive victory over a much more conservative traditional 20th century coalition. Both sides worked hard to bring out their vote but the final tally revealed the dimensions of the victory. President Obama received according to the latest tally reported on CNN 61,910,594 votes and 332 electoral college votes. Governor Romney received 58,654,765 votes. The Democrats also increased their seats in the Senate to 53 plus two independents who will lean toward them. The Republicans hold 45 Senate seats. In the House the Republicans maintained their control hanging on to 233 seats to the Democrats 193.

The nature of the victory bodes well for the Democrats and its consequences are likely to last long after President Obama leaves office.The Republican minority is going to have to face up to the fact American society is changing  and previously marginalized minorities have learned how to co-operate, how to get out the vote to build a winning majority capable of winning the Presidency and becoming a powerful force in the Senate. Political gerrymandering in redistricting House seats as one of my colleagues has explained to me makes the situation more difficult in the House but that may well change over time.

Now that Barack Obama has won this historic victory the pressing question is what will he do with it. He faces partly because of his own initial fiscal caution and other centrist leaning fiscal conservatives a partly self imposed fiscal cliff. In negotiating his way out of this he has a dilemma. How much if at all should he compromise on his desire to let the Bush tax cuts lapse on the highest income taxpayers and to what extent , if at all should he permit cuts to social democratic minimum programs like social security and  medicare. Many American politicians describe these programs as ”entitlements” a very ideologically loaded term. These are in fact programs that American taxpayers have been promised over many generations and for which they have paid through their taxes and contributions. Some adjustments in them may be necessary given the  changing demographic nature of American society. But to truly know what adjustments need to be undertaken one needs to forecast revenues and expenditures at a targeted consensus unemployment rate that reflects a full recovery, say for example 4 % unemployment. Then but only then can we conclude what the high employment surplus or deficit may be. At any unemployment above that rate the deficit reflects the fact that the business cycle has not peaked and growth and employment is below the optimal level. So in fact President Obama has a strong argument on his side to proceed cautiously with respect to Republican demands. In addition to political capital he has intellectual capital on his side.

Posted in American Presidential election, austerity, business cycles, fiscal policy, full employment, U.S. | Tagged , , | Leave a comment

President Obama leans across finish line just ahead of Romney

Posted on November 6, 2012 by haroldchorneyeconomist

I have followed American Presidential politics and elections ever since as a young boy I lamented the defeat of Adlai Stevenson by Dwight D.Eisenhower in 1956.American elections despite their blemishes remain vibrant and exciting . American democracy despite the corruption of super pacs and the grotesque unlimited spending permitted by the Supreme Court decision to allow super pacs to spend as much as they liked is still a powerful expression of mass democracy in which millions of mostly thoughtful and well informed citizens choose their leader. The electoral college to foreign eyes seems crudely anti-democratic and in desperate need of reform or even abolition. Nevertheless, it offers an exciting showcase to the selection of the American President. Based on the average of the  latest polls it would appear that President Obama now has a very narrow lead in the popular vote and a significant small lead in most of the battleground states. These include Ohio, Nevada,Wisconsin, Minnesota, Pennsylvania, Virginia, Iowa, New Hampshire, Colorado and Michigan. Among the battleground states  Romney is ahead in the polls only in Florida and North Carolina. If these poll numbers hold up in the turn out and in ballots counted Obama will win the hotly contested election. Even if several of these states outside of Ohio go to Romney Obama should still win a narrow victory. If Romney were to somehow triumph and actually implemented his policy of slashing expenditures at this fragile stage of the recovery the impact would be disasterous.

The latest U.S. unemployment numbers were somewhat of an improvement with 171 000 new jobs an improvement over the 121000 expected. The uptick in the headline rate of unemployment to 7.9 % reflected the fact that many more discouraged workers than last month rejoined the labour force searching actively for work. The broader definition of unemployment U6 actually declined to 13.9 % down from 15.3 % a year ago and 14.2 % a month ago. More needs to be done but these improvements are evidence of a slowly healing economy.

Posted in American Presidential election, U.S., Uncategorized, unemployment | Tagged , , , | 1 Comment

Unemployment and the Battleground states in the American election

Posted on October 19, 2012 by haroldchorneyeconomist

The unemployment rate has played a large role in this election. The Republicans have claimed that unemployment and the slow rate of economic growth are the fault of President Obama and his stimulus policies. I have indicated in an earlier post how unfair and inaccurate this claim is. But the fact is that the rate of unemployment may well play a critical role in how voters behave in the election. So lets look at ten battleground states where according to the average of polls the gap between the two candidates is under 5 % points.

State      U* Jan.2009  Jan.2010  Sept.2012    Obama    Romney

Florida(29)        8.7%         11.9%        8.7%         49.1%       50.4%

Ohio (18)           8.6          10.8         7.0                48.6         45.2

Pa.  (20)              6.8          8.8         8.0                49.1           45.2

N.Carolina(15)  9.2          11.1          9.0                 46.3          48.5

Virginia(13)         5.7         6.9          6.0                 47.6           46.5

Wisconsin(10)     7.1         8.7         7.6                  50.3           46.1

Colorado(9)         6.7        7.4         8.4                   47.7           46.3

Nevada(6)            9.6        13.0      11.9                   48.8           45.6

Iowa(6)                5.2         6.6        5.2                     49.3           45.2

New Hamp.(4)    5.2        7.0        5.7                     49.2            45.7

Notes:        U* is the rate of unemployment given for three different dates; the beginning of Obama’s term in office, the peak of unemployment and currently. The number in brackets following the name of the state is the number of electoral college votes that state has.

What we can see is that except for Colorado, the rate of unemployment has declined significantly from its January 2010 peak in all of these states. But in comparison to the position of the state at the beginning of 2009 only Ohio is much better off than before.Hence it would be very surprising if Obama were to lose Ohio.Unemployment has now fallen to 7 % in Ohio in comparison to 8.6 % in January 2009. A number of other states like Florida, Iowa and Virginia are either at, just below or very close to their 2009 rate of unemployment. North Carolina, New Hampshire and Wisconsin are each within .7 percent of their January 2009 rate of unemployment and also more than one percentage point point below their January 2010 peak. So if improving unemployment is a major factor, other things being equal in this election these states should fall into the Obama column come election day.In Pennsylvania unemployment has fallen .8 percentage points since its peak in 2010 but it remains 1.2 % points above the rate it had in January of 2009. However, President Obama has a relatively strong lead in the polls there , 4.9 % points, so it may well also be a Democratic party win.  In the end all elections are usually multi factorial but it will be interesting to see if improving employment delivers the vote on election day.

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This U.S. recession’s recovery in comparison to 7 earlier ones:unemployment 45 months after its peak

Posted on October 17, 2012 by haroldchorneyeconomist

One critical way of guaging the severity of a recession, the impact of policy and the changing circumstances of the gobal economy is to examine the behaviour of unemployment during and after a recession. Fortunately we have excellent monthly data available for this from the U.S. Bureau of Labour Statistics going all the way back to 1948. In the case of the depression of the 1930s there is annual data available from the Historical Statistics of the United States edited by Susan Carter et all published in 2006 by Cambridge university press. What we shall compare is the peak of unemployment in each recession and the position of the same statistic 45 months later. I am selecting 45 months as the basis of comparison because in this recession which began at the end of 2007 unemployed peaked in December 2009 at 10 % exactly 45 months ago. The rate is now 7.8 % as of September 2012. It has fallen by 22 % over the past 45 months. How does that compare with previous experience over the past 80 years ? What can this tell us about the severity of the recession ?

Have a look at the following table. Except for the great depression of the 1930s where the data set is annual all the data is monthly data.

recession date for peak of unemployment    unemployment peak rate  %decline 45 months later

1933                                                         24.9%                            23.6%(after 5 years;after 4

42.6%)

1949 October                                              7.9%                             67.1 %(2.6 % unemployment)

1961 May                                                    7.1%                            28.2%(5.1% unemployment)

1975 May                                                     9.0%                            34.4 %(5.9% unemployment)

1982  December                                           10.8%                           35.2%(7.0%unemployment)

1992 June                                                    7.8 %                            29.4 %(5.5% unemployment)

2003 June                                                     6.3 %                            30.2%

(4.4 % unemployment)

2009 December                                             10.0%                            22%    (7.8% unmpl)

The results are very interesting. They suggest that this recession also accompanied by widespread global financial failure and a major stock market crash ranks as the second most severe of the last 80 years. Unemployment peaked at 10 % below the peak of only two other recessions, the great depression of the 1930s when unemployment peaked at 24.9 % in 1933 and the deep recession of the early 1980s when unemployment peaked at 10.8 %. The reduction in unemployment after 45 months is also closest to the reduction of the rate by 23.6 % in 1938 five years after its peak in 1933.

The reduction is the smallest of all the eight recessions included in the table.

Does that mean that policy has been misguided ? No because the severity of this crisis has been underestimated by many people . As a consequence although the stimulus policy was and remains correct its size was smaller than it should have been in part because of errors made by the President’s economic advisors but also in large measure because of the obstruction in congress by Republicans and perhaps initially some conservative Democrats hostile to Keynesian ideas who refused to pass a larger stimulus or later by Republicans solely an expansion of the original stimulus. The unemployment rate will continue to drop as both manufacturing and the housing market begins to recover(the latest data are promising).

But all those who remain hawks on deficit reduction should look at this data and understand the dangers of excessive zeal for a balanced budget until such time as the economy has healed and unemployment has dropped to pre-recession lows. Critics of the President should understand that the rise in unemployment to its peak is a situation that resulted from the crisis that got underway in 2007 and whose roots were laid in the decade preceding. One cannot fairly blame him for a situation he inherited from previous administrations. And in any case business cycles driven by technology, demography, structural issues, financial speculation and growth dynamics have minds of their own. They do not follow political ideology. But how one treats them through policy can be affected by ideology rather than preferably rational  scientific inquiry.

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U.S. Unemployment drops to 7.8%. excellent news, Obama on right track;Canadian unemployment rises.

Posted on October 5, 2012 by haroldchorneyeconomist

The U.S. Bureau of Labour Statistics has released the latest unemployment numbers for September and they are good ones. They show a long awaited (and as I have been arguing) fall in the unemployment rate to below 8 % , 7.8 % in fact. This is excellent and very timely news, in the light of the political and policy debate now underway in the United States. The economy is not out of the woods yet but gradually healing and a few more months like this we should see unemployment fall below 7.5 % and perhaps lower. When we look at the fine details of the report some revealing data become available.

For example, contrary to what some spin masters on the Republican side are claiming you can first of all be certain that the report is unbiased and professional and non partisan. The Bureau of Labour statistics is very reliable and professional as is our own Statistics Canada.

In terms of the numbers according to the report total employment increased in September and the employment to population ratio now stands at 58.7 %. Part-time workers rose from 8 to 8.6 million, essentially because there were still not enough full time jobs coming on stream to absorb all of those workers who would prefer to work full rather than part time. The broad measure of unemployment U6 which includes both discouraged workers, part time workers, and all those marginally attached to the labour force fell to 14.7 % down from 16.4 % a year ago. Non farm payroll employment rose by 114,000 as compared to the average in 2012 of 146,000 per month.
In 2011 the monthly increase averaged 153,000 a month. there were upward revisions to previous monthly reports and it is plausible that this months report will also be revised upwards. so overall slow progress but progress nonetheless. If we break down the unemployment data further we see that the unemployment rates for those 16-19 are far higher than those 20 and above and white persons’ unemployment is much lower than the rate for black and Hispanic people. Asian people also have lower rates of unemployment.

Unemployment rates by Category Sept. 2011 &Sept 2012

Sept.2011                Sept.2012

Black workers                  15.9 %                    13.4

White workers                    7.9                          7.0

Hispanic                                11.3                       9.9

Asian                                      7.8                       4.3

White men  20+                    7.7                        6.6

White women 20+               7.1                          6.3

White 16-19 years old         21.2                       21.2

Black 16-19 yrs.old              43.6                        36.7

The above data show us the emerging structural nature of  some of the unemployment as aggregate demand grows and continues to absorb both new workers and previously unemployed ones there will be structural challenges in terms of youth and in terms of other factors like education , skill set and racial and linguistic discrimination. After the election is over the challenge will be to drive unemployment down below 5 % and adopt special programs to deal with the special circumstances of youth and minorities.

Canada’s unemployment rate for September, 2012 however rose from 7.3 to 7.4 %. Unemployment jumped to 8.0 % in Quebec from 7.6 % in August while the rate in Ontario fell to 7.9 % from 8%. the rates in the other provinces were as follows: Newfoundland 12.3 % (12.7 5 in Aug.); PEI 9.1 % from 9.6%; Nova Scotia, 8.6 %(9.7 % Aug.); New Brunswick 11.0% from 10.4 %; Manitoba  5.0 % (5.4 % Aug.); Saskatchewan. 4.7% (4.4% Aug.) Alberta 4.4 % (4.4% Aug.) Alberta 4.4 %(4.4%Aug.) B.C. 7.0% (6.7% (Aug.)

Posted in austerity, Canada, classical economics, deficit hysteria, deficits and debt, full employment, labour market clearing, Uncategorized | Tagged , | Leave a comment

Canada Britain co-operation makes sense despite the critics’ complaints

Posted on September 25, 2012 by haroldchorneyeconomist

The Canadian minister of External Affairs and the British foreign minister have announced a sensible program of sharing facilities in certain posts abroad in an effort to find economies and maximize their shared policy thrust where circumstances warrant. The critics have raised the alarm of returning to our colonial past when we were a ward of Great Britain and before that of France. But we haven’t been that in the case of France for 250 years and in the case of Britain for almost a century.  But we are cousin peoples at least for those who use English as their working and living language. Indeed many of us have family links with Britain as we do with France and the U.S. Just as those who use French feel justifiably a certain  closeness to France and the francophonie similar sentiments exist with respect to Britain. Great Britain in fact is one of our biggest trading partners after the U.S. accounting for over 30 billion dollars of trade and the recipient of over 19 billion dollars of our exports.(See table below courtesy of Statistics Canada) Trade with France in 2010 by comparison amounted to 7.7 billion ,2.3 billion in exports and 5.3 billion in imports. Together Canada and Britain account for over 90 million people of the English speaking world. Britain , Canada and the U.S. successfully fought as close allies during the second world war and although we have not always agreed on foreign policy we often do.We share many common cultural values, a common parliamentary system and the more that Canada grows closer to Europe through trade, education, travel, work exchange and commerce the more opportunities there will be for mutual co-operation that benefits both countries. It seems to me that given that this trading relationship is one of our fastest growing bilateral relationships ( Canada-U.K. trade is more than 4 times as large as
Canada -France trade) it is sensible to further cultivate it as we look to diversify our trade and have a counter weight to our large dependence upon American markets.We have very little to lose and plenty to gain in terms of diversifying our trade and bilateral relationships. For the time being we are talking only about certain administrative cost savings but over time other areas of co-operation may well develop.

Imports, exports and trade balance of goods on a balance-of-payments basis, by country or country grouping
 2006  2007  2008  2009  2010  2011
 $ millions
Exports 453,951.9 463,120.4 488,754.1 369,343.2 404,834.2 458,191.3
United States1 361,442.1 355,731.5 370,005.3 271,108.7 296,672.0 331,226.4
Japan 10,278.1 10,026.8 11,784.3 8,861.8 9,716.6 11,348.2
United Kingdom 11,282.2 14,152.3 14,029.3 13,046.0 16,985.8 19,431.4
Other European Union2 20,903.7 24,392.7 25,173.5 19,010.3 19,475.8 22,978.2
Other OECD3 16,808.1 19,743.6 20,748.6 16,690.6 17,908.3 20,524.5
All other countries 33,237.6 39,073.5 47,013.1 40,625.8 44,075.7 52,682.6
Imports 404,345.4 415,683.1 443,777.2 374,080.9 413,832.8 455,873.5
United States1 265,088.3 270,066.9 281,535.0 236,289.6 259,952.7 281,226.1
Japan 11,849.9 11,967.1 11,671.8 9,329.2 10,067.2 9,368.4
United Kingdom 9,547.1 9,962.9 11,232.9 8,529.6 9,560.6 10,581.2
Other European Union2 32,547.5 32,403.7 35,461.4 30,240.5 30,788.3 35,280.8
Other OECD3 23,680.1 25,159.8 27,380.4 25,961.7 29,012.9 32,687.0
All other countries 61,632.4 66,122.7 76,495.7 63,730.4 74,451.1 86,730.1
Balance 49,606.5 47,437.3 44,976.9 -4,737.7 -8,998.6 2,317.8
United States1 96,353.8 85,664.6 88,470.3 34,819.1 36,719.3 50,000.3
Japan -1,571.8 -1,940.3 112.5 -467.4 -350.6 1,979.8
United Kingdom 1,735.1 4,189.4 2,796.4 4,516.4 7,425.2 8,850.2
Other European Union2 -11,643.8 -8,011.0 -10,287.9 -11,230.2 -11,312.5 -12,302.6
Other OECD3 -6,872.0 -5,416.2 -6,631.8 -9,271.1 -11,104.6 -12,162.5
All other countries -28,394.8 -27,049.2 -29,482.6 -23,104.6 -30,375.4 -34,047.5
1. Also includes Puerto Rico and Virgin Islands
2. Other European Union includes Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
3. Other countries in the Organisation for Economic Co-operation and Development (OECD) includes Australia, Canada, Iceland, Mexico, New Zealand, Norway, South Korea, Switzerland and Turkey.
Source: Statistics Canada, CANSIM, table 228-0003.
Last modified: 2012-05-10.

Find information related to this table (CANSIM table(s); Definitions, data sources and methods; The Daily; publications; and related Summary tables).

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The fall economic conversation: Hayek versus Keynes, Romney versus Obama, whither the global business cycle ?

Posted on September 18, 2012 by haroldchorneyeconomist

Now that relative calm has  returned to Québec after the provincial election we can focus our attention on the broader economic issues that beset the global economy. The American election although currently focused on foreign policy appears set to return to the  great debate of the 1930s. How do we best prevent a depression from following a sharp business cycle downturn and which school of economic policy and theory that of Keynes or that of Hayek is best suited to accomplishing the task ? Democrat President Barack Obama despite some cautious backtracking in a fiscal conservative direction on the whole is the knight in the field representing Keynes while Republican Mitt  Romney hoists the banner of Hayek and the libertarians. Of course, there are other influences at work but in electoral terms this fall’s election will be a fair test(apart from the campaign lapses of one or the other candidate) of the politics of this debate. The latest data on growth, employment and unemployment, the move to further quantitative easing by the Federal Reserve, this time focused on the mortgage finance market and the on going crisis in European sovereign debt, excessive austerity and excessive unemployment and the attempt by the current head of the ECB to broaden its mandate to include the purchase of sovereign debt all factor into the equation.

On the U.S. employment front the data from the U.S. Bureau of Labour statistics for August showed a slight reduction in the rate down to 8.1 % from 8.3 % in July with the broader measure of unemployment falling to 14.7 % compared to 16.7 % a year ago. The rate among White workers was 7.4 % down from 7.9 % a year ago; among Black and African American workers was 14.1 % versus 16.7 % a year ago; among Asian workers the rate was 5.9 % versus 7.1 % a year ago; among young workers 16 to 19 years of age the rate was 22.8 % unchanged from a year ago. So there was some improvement but not enough to develop a substantial positive trend. Also the participation rate fell probably because of a rise in discouraged workers although the demographics of retirement may be playing a role here as well. Educational attainment also plays an important role in employment. The unemployment rate among those with at least a university or college Bachelor’s degree was 4.1 %; those with some college 6.6 %; those with a high school diploma 8.8% and those with less education than that 12 %.

Just to remind ourselves of how much déjà vu is at work in this campaign have a look at several works which document very well the kinds of views that prevailed during the depression of the thirties about debt, deficits, crowding out, the Treasury orthodoxy regarding the futility of government financed public works , the virtues of of thrift and laissez-faire and the opposition to public spending on behalf of the unemployed. For example, Alan Booth, at the time a lecturer in economic history at the University of Exeter wrote an excellent work on this that was published in 1989 by Harvester Wheatsheaf. Its title British Economic Policy 1931-1949:Was there a Keynesian revolution ?

Booth clearly shows there was a very significant difference between the policies and theoretical thrust of the ideas advanced by Keynes and his followers and the more restrictive version that  Whitehall finally implemented during the war years in the 1940s and in the immediate post war world. But equally important Booth documents in detail the ferocious Treasury opposition to Keynesian stimulus, their insistence upon crowding out, the role of Hayek in seeking to undermine Keynes’ argument, including the fact that he had been  recruited by Lionel Robbins at the LSE  in 1930 to lead a pole of attraction in opposition to Keynes at Cambridge. For the first two thirds of the 1930s Keynes was largely isolated from real influence in government circles. His break with the Liberals over free trade further isolated him from the party system through which he might have had a greater and more rapid influence in shifting policy. (p.31) Hayek, of course, had developed a totally different view from Keynes of the business cycle. See my paper  on the Theory of the Business Cycle in Keynes ,Hayek and Schumpeter read to the Association of Heterodox economics , London U.K., July 7, 2001 posted on this blog site  in Sept. 2011 https://haroldchorneyeconomist.com/2011/09/13/the-theory-of-the-business-cycle-in-hayek-keynes-and-schumpeter/.  In his work Hayek stressed over investment as the cause of the crisis and advocated austerity and budget cutting as the solution. In the current circumstances the parallels are uncanny, given the Republican critique of President  Obama’s stimulus and public investment generally and the Republican ‘s tea party wing’s love affair with laissez-faire.

A rereading of Roy Harrod’s biography of Keynes (Roy Harrod, The Life of John Maynard Keynes ,W.W. Norton&Co., 1951) also supplies ample evidence of this where he describes the Treasury view of stimulus leading to crowding out in the 1930s and the bogy of inflation already in the 1920s when Keynes was working out his opposition to returning to the gold standard in the Tract on monetary reform. Thrift was considered a virtue as opposed to the vice it had become during the depression.(pp.405-409)

My own work on deficit hysteria also documents the widespread antipathy to deficit spending  that existed in Canadian policy circles during the 1930s.(see for example, Harold Chorney,  The Deficit and Debt Management:An Alternative to Monetarism, The Canadian Centre for Policy Alternatives , 1989.)

History does tend to repeat itself, at least, in part, it appears.

Posted in austerity, business cycles, deficit hysteria, deficits and debt, European debt crisis, Federal Reserve, fiscal policy, free trade and globalization, full employment, Hayek, treasury view, U.K. economy, U.S., Uncategorized, unemployment | Leave a comment

Poli 610:Macro-economic theory and policy after Keynes and the crash of 2008

Posted on September 6, 2012 by haroldchorneyeconomist

Pol. 610  Macro-economic policy-making after Keynes

Concordia University

fall, 2012
Prof. H. Chorney tel. 848 2424 ext.2106 
e mail Chorney@alcor.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 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 aspects of globalization and their impact upon growth theory and macroeconomics, as well as the impact of 9/11, the New Orleans catastrophe,the election of Barack Obama and his campaign for re-election against a Republican party that rejects Keynesian policy, the  credit crisis, the recent revenge of the bond markets  in Europe 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 new Obama administration including substantial investment in infrastructure and reregulation of the banking, financial, energy and transportation sectors has stabilized the slump that followed the financial crash . Growth has now resumed although it is not yet robust.  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 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 ( 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, N.Y.Berlin&London:Bloomsbury Press, 2009.  *
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
 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 Times. The 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:

September 27, 2012  Say’s Law and the question of unemployment.  Lisa M.

October 4 : Keynes before the General theory, The Economic Consequences of the Peace Anahita B. Classical economics and the business cycle, the crash of 1929,Veblen and Galbraith on business enterprise. hrc.

October 11: The financial crisis+crash; aggregate supply+demand, the investment process and the marginal efficiency of capital.  hrc

October 18:Keynes before the General theory, the Treatise on Money and the Tract on Monetary reform the fundamental equations and the  question of inflation.  hrc

October 25: The Great depression and the New Deal, Andrea S. & Andrew S. The treasury response to Keynes Clarke on Keynes and the Macmillan inquiry.  hrc

Nov.1: Keynes, Shaw and Marx Daniel P. The multiplier, Galbraith’s role in bringing Keynes to  America hrc

Nov. 8 The bastardization of Keynes , Laura M. IS LM & uncertainty, G.E.Moore and Keynes,  hrc.

Nov. 15  The deficit and public finance. Andrew P.  stagflation  Caroline C.

Nov. 22   rational expectations. Scott W.    Ricardian equivalence &policy impotence the ”new” classical macro-economics, hrc.    Stefana,The Natural rate of unemployment and NAIRU.  Phillips and post Phillips hrc.

Nov.29 Canadian Maco-economic policy since 1945. Christianne K;

Dec.4, 2012; OPEC inflation and interest rates, Nadia H.; Stiglitz, Krugman second stimulus or double dip recession, the crash and re-regulation. Margaret M.;  Rediscovering full employment, Nicholas M.

Posted in austerity, business cycles, Canada, classical economics, deficit hysteria, deficits and debt, European debt crisis, European unemployment, Federal Reserve, fiscal policy, France politics+economy, free trade and globalization, full employment, Hayek, J.M.Keynes, Keynesian multiplier, labour market clearing, Milton Friedman and NAIRU, monetary policy, natural rate of inflation, quantitative easing, quantity theory of money, Schumpeter, U.K. economy, U.S., Uncategorized, unemployment | Leave a comment

Poli 349 Fall 2012

Posted on September 5, 2012 by haroldchorneyeconomist

Under construction:

Poli 349 Fall 2012

POLITICS 349 Fall 2012
Professor Harold Chorney
Concordia university
Chorney@alcor.concordia .ca
office hours Tuesday 5:10 to 6 :10
This course explores the deep seated search for community in the context of the debate between postmodernism and modernism and the nature of metropolitan culture.We trace the emergence of the global city and the profound impact this form of urbanization has had on everyday life.The recent  prolonged economic slump that  emerged following the great crash of 2008 once again casts a shadow on the life of modernity. The need for solidarity and community is once again a high priority in the values of many.Indeed it may well be an existential need. For the past two centuries the rise of the city has been one of the most profound transformations in daily life. We explore the the evolution of the town into the city, the city into the metropolis, and the rise of class and then mass society.We examine the role of mass society in contributing to the rise of global culture and the tensions that this presents. The debate between modernism and postmodernism is essential to tracing the cultural, political and socio-economic impact of this evolution. The course explores this argument in the history of social theory and the on-going quest for community that appears to be at the heart of the modern urban and political experience.

Texts: Harold Chorney, City of Dreams, Nelson Canada 1990. A large format edition of this work is available from Nelson-Thomson, 2002 and has been ordered for the Concordia  bookshop.

Lawrence Cahoon ed. , From Modernism to Postmodernism:An Anthology Blackwell, 2003.2nd edition.Available in the  bookshop.

Richard Appignanesi and Chris Garrat, Postmodernism for Beginners.

An additional text on contemporary cities and urban politics will be announced in the first several weeks of class. Evaluation: One essay 50 % due mid term and one final test 50 %; or one practicum 20% and one essay 30 % and one final test 50 %.

Topics:

1. Introduction: The quest for community.reading: Chorney, introduction, pp1-9. Cahoone, introduction pp1-13.

2. Modernism versus post-modernism.The emergence of virtuality. La vie quotidiene.reading; Cahoone introduction, and pp.17-62. Appignesi and Garrat, introduction.

3. Further exploration of modernism versus post modernism.Readings: Cahoone: Hegel, Baudelaire, Freud, Husserl, Heidigger,Bell, Derrida, Horkheimer and Adorno, Lyotard, Rorty and Habermas.Others tba.

4. Alienation and class consciousness. The quest for community in the work of Marx and Engels. The influence of Hegel.The significance of the French Revolution. Reading Chorney. chapter two.

5. The critique of Ferdinand Toennies. Gemeinschaft versus Gesellschaft.Chorney , chapter 3.

6. The metropolis and mental Life. Georg Simmel, Berlin and the intensification of nervous stimuli. chapter 4

7. Urbanization and anomie: The work of Emile Durkheim.Chorney chapter 5

8.Max Weber: Modernism and Disenchantment.Chorney , chapter 6; Max Weber, Economy and society, selected chapters; Arthur Mitzman, Max Weber and the Iron Cage of Reason.Hans Girth and C.Wright Mills, Introduction to Max Weber.

9. The Chicago School and contemporary American mainstream urban theory. From Frank Park to Louis Worth to Herbert Gans and Claude Fischer. Saskia Sassen, Globalization and its discontents .

10. Georg Lukacs:Reification and the consciousness of the proletariat.Chorney, ch. 8.

11.Walter Benjamin:The culture of mechanical reproduction. The culture industry, from Berlin to Paris to Hollywood.The eclipse of post-modernism ? The dialectic of enlightenment. Canadian Renaissance cities. Benjamin, the arcades project.Chorney ch.9.

12. The phenomenology of the urban.From Social theory to public policy and urban politics.The Canadian metropolis;Montreal urban politics. Chorney, ch.10 & .Macleans cover story on Montreal. Nov. 9, 2009.

13. Conclusion: Toward a critical theory of public policy. The metropolis and globalization.

Essay assignment: Due in class the first full week in November on Tuesday Nov.6.

Please research and write a 12-15 page essay on one of the the following topics. Be certain to use a manual of style for example , Kate Turabian, A Manual for Writers, University of Chicago Press and include it in your bibliography. Each essay should have a cover page with your name, the title of the essay, course details etc , as well as footnotes or end notes and a separate bibliography. In your bibliography include all works you have consulted and cited. Be sure to consult books, periodical literature of an academic nature, quality newspapers and magazines where appropriate and internet material .Do not plagiarise other authors’ work. Always acknowledge your sources properly.With respect to internet items give the time and date at which you consulted the material. List of suggested topics:

1. Discuss the relationship between Marx and Hegel. Is it possible to understand Marx without seeing his Hegelian connection?

2. What is post-modernism ? What is its relevance to the contemporary world we live in ? Is it excessively pessimistic or realistic about political change and popular culture ?

3. Select a writer from City of Dreams and explore his work in depth.

4. Discuss the political economy of Marx. What relevance , if any does it have to the global metropolis ?

5. What is a feminist critique of metropolitan life entail ? Can we differentate the urban experience by gender ? Provide a detailed answer.

6. Select an urban planning issue like homelessness, public transportation, building an ecological city, grassroots urban political movements or rebuilding urban infrastructure and explore it in detail.

7. Explore the political and constitutional status of cities in Canada. What changes are needed in order to improve the governance and economic performance of our cities.

8. How has the recent economic crisis affected our sense of global culture and metropolitan life ?

9. Select a major Canadian or global metropolis and do an intensive case study of the city, its history, its contemporary status, its political economy and its cultural life.

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. 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.c/c+v= s/v(1-1.c/c +v) = s'(1-q) (p.68) We won’t be pursuing this controvery further in the course but those who wish to read further about it 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 ?

Perspectivism:One of you brought up this approach 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.

Posted in community, modernism versus ^post modernism, the metropolis, Uncategorized, urban culture | Leave a comment

Quebec election:PQ 54, Liberals 50, CAQ 19, Quebec solidaire 2.PQ minority government.

Posted on September 5, 2012 by haroldchorneyeconomist

Québec has voted and the results are the election of a weak minority PQ government. The PQ received 32 % of the vote as opposed to the 31 % who voted for the Québec Liberal party. The CAQ received 27 % of the vote and Québec solidaire 6 % of the vote. The polls once one takes the margin of error involved were close but seem to have underestimated the Liberal vote slightly. Seat projections were less clear and inaccurate. The Liberals performed somewhat better than many journalists and pollsters suggested. The combined total of the CAQ and the Liberals constitute 58 % of the votes cast . The combined totals of the sovereignist PQ and the sovereigntist QS are 37 % of the total votes cast. The margin of defeat for the Liberals amounted to a handful of seats lost by no more than a few 1000 votes in total.  If the PQ tries to implement its sovereigntist agenda it will lose the support of the majority of members in the assembly. An alternative government a Liberal CAQ coalition is available. We shall see how long this minority government lasts.

Posted in Uncategorized | Leave a comment