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There is very little difference between so-called Keynesian and Austrialian economics. The both rest on the same fundamental assumptions. All economists are politicians wrapped in math.

Economists enamored of pure markets begin with the theory, and hang models on assumptions that cannot themselves be challenged. The characteristic grammatical usage is an unusual subjunctive — the verb form ‘must be.’ For example, if wages for manual workers are declining, it must be that their economic value is declining. If a corporate raider walks away from a deal with half a billion dollars, it must be that he added that much value to the economy. If Japan can produce better autos than Detroit, there must be some inherent locational logic, else the market would not dictate that result. If commercial advertising leads consumers to buy shoddy or harmful products, they must be ‘maximizing their utility’ — because we know by assumption that consumers always maximize their utility. How do we know that? Because to do anything else would be irrational. And how do we know that individuals always behave rationally? Because that is the premise from which we begin. The truly interesting institutional questions — the disjunctures between what free-market assumptions would predict and the actual outcomes — are dismissed by the tautological and deductive form of reasoning. The fact that the real world is already far from a perfect market is ignored for the sake of theoretic convenience. The dissenter cannot challenge the theory; he can only describe the real world.”
— Robert Kuttner, EVERYTHING FOR SALE

The neoclassical school is the dominant (and probably the numerically largest) school in contemporary economics. For neoclassical economists, microeconomic theory (i.e., welfare economics) underlies every theoretical subfield of specialization and every theoretical, practical, and policy-oriented conclusion at which they arrive. All of their cost-benefit analyses, their demonstrations of the universal gains from foreign trade, their notions of market efficiency that are encountered in every branch of applied economics, as well as their notion of rational prices, have absolutely no meaning whatsoever other than that manifested in their faith that a free-enterprise, competitive market system will tend toward a Pareto optimal situation. Without a Pareto optimal situation in effect, these phrases and notions cannot be defended. In fact, in the absence of an optimal situation, these phrases have no meaning whatsoever. They are given meaning only when the neoclassical economists first posit the existence of a Pareto optimum; then, by definition, all exchangers are said to gain, resources are said to be ‘efficiently allocated,’ prices are said to be ‘rational’ and therefore conducive to making accurate assessments—on utilitarian grounds—of the social costs and social benefits of various government projects. Utilitarian neoclassical welfare economics pervades and dominates nearly all neoclassical analyses on all theoretical and practical matters.” (Emphasis in original) — HISTORY OF ECONOMIC THOUGHT: A CRITICAL PERSPECTIVE, Third Edition, E. K. Hunt & Mark Lautzenheiser, 2011

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http://dissidentvoice.org/2010/12/a-tale-of-two-websites/His dead, soulless eyes gaze out from the red borders of the magazine with a thousand mile stare; the photograph looks like an android failing the Voight-Kampff test, or the mug-shot of a frat boy baked on XTC; but this is not just another arrogant whelp of privilege and nepotism, this glassy-eyed perp is Mark Zuckerberg, the billionaire monomaniac behind Facebook and its 550 million willing victims.

This is Time Magazine’s Person of the Year.

If, as Charles Eisenstein writes in the Ascent of Humanity, the process of capitalism is the transformation of life into money,1 then Facebook’s relentless march into the commoditization of privacy2 and the wholesale monetization of human relationships3 is at the vanguard of capital’s final war against reality.

Zuckerberg is nothing more than a particularly driven and fortunate cynic: like others, he recognized a previously unenclosed portion of the cultural commons, so he malevolently fenced it off and put it up for sale. It seems he also stole his business idea from his Harvard classmates,4 broke into early Facebook user’s emails,5 and considers his users to be “dumb fucks”6 — topics never mentioned in Time‘s eight thousand word reportorial blowjob of boy wonder.

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Time for some Joe Bagaent

http://www.joebageant.com/joe/2010/12/america-y-ur-peeps-b-so-dum.html

In the historical view, cultural ignorance is more than the absence of knowledge. It is also the result of long term cultural and political struggle. Since the industrial revolution, the struggle has been between capital and workers. Capital won in America and spread its successful tactics worldwide. Now we watch global capitalism wreck the world and attempt to stay ahead of that wreckage clutching its profits. A subservient world kneels before it, praying that planet destroying jobs will fall their way. Will unrestrained global capitalism, with all the power and momentum on its side and motivated purely by machinelike harvesting of profits, reduce the faceless masses in its path to slavery? Does a duck shit in a pond?

Meanwhile, here we are, American riders on the short bus, barreling into the Grand Canyon. With typical American gunpoint optimism, we’ve convinced ourselves we’re in an airplane. A few smarter kids in the back whisper about hijacking and turning the bus around. But the security cop riding shotgun just strokes his taser and smiles.

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retirement is not possible with modern financial civilization once growth stops. Industrial is another matter altogether. Basing any society on perpetual growth is doomed to fail and EVERYthing in a capitalist society is heavily contingent on perpetual growth. Once that stops then look out – which is where we are about at in history. The end of growth based economics. First we need to go through the cannible stage of capitalism – where it has to eat itself to survive. It wont be pretty. Of course I saying this on a finance board is akin to speaking in tongues. We probably can handle a stagnation for some time but not a contraction, which will eventually come. Watch the canary in the coal mine greece to see the future. It’s all c-c-c-connected

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[quote=harvey][quote=Arraya]There are many human systems that ultimately rest on the buy-in of new entrants, and every one of them will ultimately meet the same fate, although it can take far longer for complex constructions than for simple pyramid frauds.[/quote]

Wow! You found a link on the internet that makes profound comparisons between ponzi schemes and, well, damn-near everything.

Every plan for the future assumes growth (except those that involve killing your neighbors for their food supply.)

The assumption of growth does not imply fraud.

Labeling any plan that relies on growth as “ponzi” is trite, intellectually shallow, and outright lame.[/quote]

No your argument is ¨trite, intellectually shallow, and outright lame

The doctrine of never ending growth is a failed doctrine because of physics. Then again, ¨modern¨economics is not a reality based system. It´s a quasi’religious, pseudoscience based on false assumptions and mythology. A linear system can not exist on a finite planet, period. The fact the the whole global economic system has to keep growing or it starts collapsing is almost a comic book error in design.

Economic ¨growth is essentially over in the modern world. Have fun clinging to your irrational and damaging religion. Not everybody wants to share your delusions, though.

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[quote=harvey]You really need to understand what a Ponzi scheme is before you say stupid stuff like that..[/quote]

http://theautomaticearth.blogspot.com/2008/11/debt-rattle-november-26-2008-from-top.html
Everyone has heard of pyramid, or Ponzi, schemes. In their simplest form they are short-lived deliberate frauds where a small number of existing members are paid from the buy-in of a larger number of newer members until the supply of newer members is exhausted, whereupon they collapse. Typically, the founders, and perhaps a few others who got in early and out before it was too late, end up making a lot of money at the expense of later entrants, who end up holding the empty bag. There are always many more losers than winners. What most do not realize, however, is that Ponzi dynamics are far more pervasive than people think. There are many human systems that ultimately rest on the buy-in of new entrants, and every one of them will ultimately meet the same fate, although it can take far longer for complex constructions than for simple pyramid frauds.

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[quote=flyer]Since “A population of debtors skating at the edge of disaster,” seems to be a very probable reality for our society in future years, all the more reason to make sure one has provided in all possible ways for one’s immediate and extended family.

lf.[/quote]. The debt data is pretty daunting. Another contraction would be catastrophic to a large portion of the population. We have roughly 70 percent of households that don’t have a thousand dollars for an emergency but they are inundated with debt. Student loans are at 27 percent delinquency rate now. Which, generation of, skyrocketed during the recession. That is a lot of people banking on a recovery that may never come

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it offered little in the way of enlightenment regarding how we should be dealing with things differently going forward

That is an important discussion that IS happening all over the globe. There is no shortage of ideas.

http://rt.com/programs/interview/capitalism-end-system-replace/“Modern capitalism has reached the end of its rope. It cannot survive as a system,” Wallerstein said. “And what we are seeing is the structural crisis of the system. The structural crisis goes on for a long time. It really started more or less in the 1970s and will go on for another 20, 30, 40 years. It is not a crisis of a year or of a short moment, it is the major structural unfolding of a system. And we are in transition to another system and, in fact, the real political struggle that is going on in the world that most people refuse to recognize is not about capitalism – should we have or should we not have it – but about what should replace it.”

Immanuel Wallerstein also explained there are two different views on what should replace capitalism.

“I would like a more relatively democratic, more relatively egalitarian world – that is one view,” he said. “We never had that in the history of the world, but it is possible. The other view is that you have a very unequal, polarizing, exploitative system. It does not have to be capitalism. Capitalism is that. But you can do that in many other ways, some of which may be far worse than capitalism.”

Order out of chaos

http://en.wikipedia.org/wiki/Spontaneous_order

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Fuck the police

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Interest-bearing loans, in turn, probably originated in deals between the administrators and merchants who carried, say, the woollen goods produced in temple factories (which in the very earliest period were at least partly charitable enterprises, homes for orphans, refugees or disabled people for instance) and traded them to faraway lands for metal, timber, or lapis lazuli. The first markets form on the fringes of these complexes and appear to operate largely on credit, using the temples’ units of account. But this gave the merchants and temple administrators and other well-off types the opportunity to make consumer loans to farmers, and then, if say the harvest was bad, everybody would start falling into debt-traps.

This was the great social evil of antiquity – families would have to start pawning off their flocks, fields and before long, their wives and children would be taken off into debt peonage. Often people would start abandoning the cities entirely, joining semi-nomadic bands, threatening to come back in force and overturn the existing order entirely. Rulers would regularly conclude the only way to prevent complete social breakdown was to declare a clean slate or ‘washing of the tablets,’ they’d cancel all consumer debt and just start over. In fact, the first recorded word for ‘freedom’ in any human language is the Sumerian amargi, a word for debt-freedom, and by extension freedom more generally, which literally means ‘return to mother,’ since when they declared a clean slate, all the debt peons would get to go home.

One could tell the history like this: eventually the Egyptian approach (taxes) and Mesopotamian approach (usury) fuse together, people have to borrow to pay their taxes and debt becomes institutionalized.

Taxes are also key to creating the first markets that operate on cash, since coinage seems to be invented or at least widely popularized to pay soldiers – more or less simultaneously in China, India, and the Mediterranean, where governments find the easiest way to provision the troops is to issue them standard-issue bits of gold or silver and then demand everyone else in the kingdom give them one of those coins back again. Thus we find that the language of debt and the language of morality start to merge.

In Sanskrit, Hebrew, Aramaic, ‘debt,’ ‘guilt,’ and ‘sin’ are actually the same word. Much of the language of the great religious movements – reckoning, redemption, karmic accounting and the like – are drawn from the language of ancient finance. But that language is always found wanting and inadequate and twisted around into something completely different. It’s as if the great prophets and religious teachers had no choice but to start with that kind of language because it’s the language that existed at the time, but they only adopted it so as to turn it into its opposite: as a way of saying debts are not sacred, but forgiveness of debt, or the ability to wipe out debt, or to realize that debts aren’t real – these are the acts that are truly sacred

And the Debtocalypse marches on….

What’s been happening since Nixon went off the gold standard in 1971 has just been another turn of the wheel – though of course it never happens the same way twice. However, in one sense, I think we’ve been going about things backwards. In the past, periods dominated by virtual credit money have also been periods where there have been social protections for debtors. Once you recognize that money is just a social construct, a credit, an IOU, then first of all what is to stop people from generating it endlessly? And how do you prevent the poor from falling into debt traps and becoming effectively enslaved to the rich? That’s why you had Mesopotamian clean slates, Biblical Jubilees, Medieval laws against usury in both Christianity and Islam and so on and so forth.

Since antiquity the worst-case scenario that everyone felt would lead to total social breakdown was a major debt crisis; ordinary people would become so indebted to the top one or two percent of the population that they would start selling family members into slavery, or eventually, even themselves.

Well, what happened this time around? Instead of creating some sort of overarching institution to protect debtors, they create these grandiose, world-scale institutions like the IMF or S&P to protect creditors. They essentially declare (in defiance of all traditional economic logic) that no debtor should ever be allowed to default. Needless to say the result is catastrophic. We are experiencing something that to me, at least, looks exactly like what the ancients were most afraid of: a population of debtors skating at the edge of disaster.

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[quote=flu]

WHAT THE HELL IS GOING ON???
It seems like I woke up this morning and the world went to the shitter overnight…[/quote]

Naa.. It never really stopped.

http://theautomaticearth.org/Earth/planet-earth-fubar.html

I can already hear the critics and naysayers chirping – “But, but, we’ve heard all of this before. You all have been talking about financial meltdown for years now, and it never happens. We just keep on chugging along like the little engine that could”.

Bullshit! It has happened; it is happening. Every day for the past year has been one in which the Eurozone could erupt in flames, figuratively AND literally, and financial contagion could sweep through the global banking system. That is the definition of systemic meltdown – the critical point past which a system is constantly exposed to the risk of CRISIS.

We all know the story in Europe. The peripheral EZ economies are in freefall as private/public credit evaporates and unemployment soars, while the backlash against blatant wealth extraction, a.k.a. “austerity”, has reached epic proportions. Greece is closer than ever to saying “SHOVE IT” and leaving the Union. So what happens after that??

Europe will be F.U.B.A.R., that’s what. Capital exodus, financial contagion, hyperinflation, social unrest, civil war – you name it – it’s all on the table. What if Greece manages to stay in and none of this happens? Does that mean everything is all better and the crisis point has been averted? Go ahead – sit back, relax and give it a few more weeks or months, but just remember that you will NEVER know when it will hit you like a MACK truck – only that it most certainly will.

Along with the economic “crisis” we seem to have a crisis in criminality. Rotten to the core

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[quote=Allan from Fallbrook]Markmax Redux: You’re obviously unfamiliar with the work of economic anthropologist David Graeber: http://www.amazon.com/Debt-The-First-000-Years/dp/1933633867/ref=sr_1_1?ie=UTF8&qid=1336510491&sr=8-1

This book is absolutely filled with historical data and will utterly debunk many of the falsehoods you’ve attempted to deploy here (under this and your other nom-de-plume.)

[/quote]

Absolutely Fantastic book! I just picked it up and ploughed through half of it in the past couple days.

fyi- Graeber is one of the architects of Occupy

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[quote=squat250]This sounds like Marxist college seminar stuff.

I want interviews with real people, not professors.

That’s partly why I loved the book that started the thread.[/quote]

You want a steamy hollywood version. Actually, I worked for an escort service as a driver/body guard for close to a year back in the 90s. The above description is accurate

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Well, we did have a libertarian “experiment”. It was from about 1820 to the Sherman Anti-trust act in 1890. It led to monopolies and the turn of the century labor movements.

Though, I would like to see it happen again. The social stress would be enormous.

Ironically, the first libertarian experiment needed to be launched with massive state intervention.

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