Greenspan admits ‘mistake’ that helped crisis - Economy in Turmoil- msnbc.com
Greenspan admits ‘mistake’ that helped crisis - Economy in Turmoil- msnbc.com
"Saint Alan," Atlas Shrugged, Ayn Rand devotee, publicly admits it's all hogwash, dreck, doo-doo, eyewash, B.S., and he screwed up royally, helping to drive the economy into the ditch.
And guess who had it right? This abstract of an article by John Cassidy which appeared in 1997, in the New Yorker, informed my opinions. Bolded highlights are mine:
October 20, 1997, p. 248
Keywords
Capitalism; Communism; Economics; Marx, Karl THE NEXT THINKER about Karl Marx's influence as an economist... Writer was talking with a college friend who now worked at a big Wall Street investment bank... To my surprise, he brought up Karl Marx. "The longer I spend on Wall Street, the more convinced I am that Marx was right," he said. I assumed he was joking. "There is a Nobel Prize waiting for the economist who resurrects Marx and puts it all together in a coherent model," he continued, quite seriously. "I am absolutely convinced that Marx's approach is the best way to look at capitalism." I didn't hide my astonishment. We had both studied economics during the early eighties at Oxford, where most of our teachers agreed with Keynes that Marx's economic theories were "complicated hocus-pocus" and Communism was "an insult to our intelligence." The prevailing attitude among bright students of our generation was that Marx's arguments were fit only for polytechnic lecturers and aspiring Labour Party politicians... More than fifty years ago, Edmund Wilson noted that much of Marx's prose "hypnotizes the reader with its paradoxes and eventually puts him to sleep." The passing decades have not made the going any easier. Marx was ludicrously prolix... The writer gradually began to understand what his friend meant. In many ways, Marx's legacy has been obscured by the failure of Communism, which wasn't his primary interest. In fact, he had little to say about how a socialist society should operate, and what he did write, about the withering away of the state and so on, wasn't very helpful--something Lenin and his comrades quickly discovered after seizing power... When Marx wasn't driving the reader to distraction, he wrote riveting passages about globalization, inequality, political corruption, monopolization, technical progress, the decline of high culture, and the enervating nature of modern existence--issues that economists are now confronting anew... Marx was born in 1818, and died in 1883... Marx wasn't a crude reductionist, but he did believe that the way in which society organized production ultimately shaped people's attitudes and beliefs. Capitalism, for example, made human beings subjugate themselves to base avarice... "Globalization" is the buzzword of the late twentieth century, on the lips of everybody from Jiang Zemin to Tony Blair, but Marx predicted most of its ramifications a hundred and fifty years ago... Globalization is set to become the biggest political issue of the next century... In one way, Marx's efforts were a failure. His mathematical model of the economy, which depended on the idea that labor is the source of all value, was riven with internal inconsistencies and is rarely studied these days.... One important lesson Marx taught is that capitalism tends toward monopoly--an observation that was far from obvious in his day--giving rise to a need for strong regulation.... Likewise endogenous-growth theory models are undoubtedly Marxist in spirit, since their main aim is to demonstrate how technical progress emerges from the competitive process, and not from Heaven, as in the neoclassical model. Describes Marx's "theory of immiseration" which says that profits would increase faster than wages, so that workers would become poorer relative to capitalists over time, and this is what happened during the last two decades. Inflation-adjusted wages are still below their 1973 levels, but profits have soared. ... A key question for the future, the answer to which will determine the fate of the soaring slock market and much else, is whether capital can hold on to its recent gains. Writer visits Highgate Cemetery, where he visited Marx's grave... Perhaps me most enduring element of Marx's work is his discussion of where power lies in a capitalist society. This is a subject that economists, with their fixation on consumer choice, have neglected for decades, but recently a few of them have returned to Marx's idea that the circumstances in which people are forced to make choices are often just as important as the choices... Marx, of course, delighted in declaring that politicians merely carry water for their corporate paymasters... The sight of a President granting shady businessmen access to the White House in return for campaign contributions would have shocked him not at all. Despite his errors, he was a man for whom our economic system held few surprises. His books will be worth reading as long as capitalism endures.
"Saint Alan," Atlas Shrugged, Ayn Rand devotee, publicly admits it's all hogwash, dreck, doo-doo, eyewash, B.S., and he screwed up royally, helping to drive the economy into the ditch.
And guess who had it right? This abstract of an article by John Cassidy which appeared in 1997, in the New Yorker, informed my opinions. Bolded highlights are mine:
October 20, 1997, p. 248
Keywords
Capitalism; Communism; Economics; Marx, Karl THE NEXT THINKER about Karl Marx's influence as an economist... Writer was talking with a college friend who now worked at a big Wall Street investment bank... To my surprise, he brought up Karl Marx. "The longer I spend on Wall Street, the more convinced I am that Marx was right," he said. I assumed he was joking. "There is a Nobel Prize waiting for the economist who resurrects Marx and puts it all together in a coherent model," he continued, quite seriously. "I am absolutely convinced that Marx's approach is the best way to look at capitalism." I didn't hide my astonishment. We had both studied economics during the early eighties at Oxford, where most of our teachers agreed with Keynes that Marx's economic theories were "complicated hocus-pocus" and Communism was "an insult to our intelligence." The prevailing attitude among bright students of our generation was that Marx's arguments were fit only for polytechnic lecturers and aspiring Labour Party politicians... More than fifty years ago, Edmund Wilson noted that much of Marx's prose "hypnotizes the reader with its paradoxes and eventually puts him to sleep." The passing decades have not made the going any easier. Marx was ludicrously prolix... The writer gradually began to understand what his friend meant. In many ways, Marx's legacy has been obscured by the failure of Communism, which wasn't his primary interest. In fact, he had little to say about how a socialist society should operate, and what he did write, about the withering away of the state and so on, wasn't very helpful--something Lenin and his comrades quickly discovered after seizing power... When Marx wasn't driving the reader to distraction, he wrote riveting passages about globalization, inequality, political corruption, monopolization, technical progress, the decline of high culture, and the enervating nature of modern existence--issues that economists are now confronting anew... Marx was born in 1818, and died in 1883... Marx wasn't a crude reductionist, but he did believe that the way in which society organized production ultimately shaped people's attitudes and beliefs. Capitalism, for example, made human beings subjugate themselves to base avarice... "Globalization" is the buzzword of the late twentieth century, on the lips of everybody from Jiang Zemin to Tony Blair, but Marx predicted most of its ramifications a hundred and fifty years ago... Globalization is set to become the biggest political issue of the next century... In one way, Marx's efforts were a failure. His mathematical model of the economy, which depended on the idea that labor is the source of all value, was riven with internal inconsistencies and is rarely studied these days.... One important lesson Marx taught is that capitalism tends toward monopoly--an observation that was far from obvious in his day--giving rise to a need for strong regulation.... Likewise endogenous-growth theory models are undoubtedly Marxist in spirit, since their main aim is to demonstrate how technical progress emerges from the competitive process, and not from Heaven, as in the neoclassical model. Describes Marx's "theory of immiseration" which says that profits would increase faster than wages, so that workers would become poorer relative to capitalists over time, and this is what happened during the last two decades. Inflation-adjusted wages are still below their 1973 levels, but profits have soared. ... A key question for the future, the answer to which will determine the fate of the soaring slock market and much else, is whether capital can hold on to its recent gains. Writer visits Highgate Cemetery, where he visited Marx's grave... Perhaps me most enduring element of Marx's work is his discussion of where power lies in a capitalist society. This is a subject that economists, with their fixation on consumer choice, have neglected for decades, but recently a few of them have returned to Marx's idea that the circumstances in which people are forced to make choices are often just as important as the choices... Marx, of course, delighted in declaring that politicians merely carry water for their corporate paymasters... The sight of a President granting shady businessmen access to the White House in return for campaign contributions would have shocked him not at all. Despite his errors, he was a man for whom our economic system held few surprises. His books will be worth reading as long as capitalism endures.
posted by Stephen's Pictures | 10:03 AM
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