Doug's Paradise

There are several major problems with our government in my eyes right now. Many times when I look at Washington these days I am saddened and scared for the countries future. Not because of specific policies or the screamers in the media but for a much larger problem entirely. The problem is that people can’t seem to see the forest through the trees, they can’t see the good that action will take because they are forced to stay right on party line or risk losing their job. It has bred a place where saying “No” to everything is better than actually trying to help your country.  On both sides of the aisle people choose to say “I will let the country rot, as long as I have my job.” This is quite possibly the most poisonous mindset to have as a politician because people vote you in to do things, not to just sit there. People need to realize that some action is always better than no action and in my opinion the best example of this is Pres. Obama who recently gave one of the best SOTU speeches I have ever heard, he emphasized actually doing things over towing party lines and I wish people actually listened. 

The second thing people need to realize is that parties are not one size fits all and that if someone in the party believes in something that doesn’t mean everyone else does too. I have recently grown to see the merit in respecting the people for themselves over the party they belong to and it has led me to be much more careful about my classification of people. In turn I have better discussions, more respect and a lot more fun. People need to learn to have respect and evaluate people based on the person and not the letter next to their name. 

Discuss, learn, enjoy others opinions, respect and change the way you view other people. We are going through hard times but we need to have leaders that take action for the good of the country to lead us through. Will these be them? Or can we get some new blood in Washington.

I have recently gotten into quite a few discussions of which economic policy would be the best for our country in these trying times. This has always been an interesting discussion for me because I have a philosophy background that I feel assists me in seeing the realistic nature of theoretical points as well as the idealized nature. I am a post-Keynesian, a follower of Keynes, Kalecki, Khaldor and Minsky. In this view there are rejections of orthodox economics, namely the rejection of the axiom of reals, axiom of gross substitution and the axiom of ergodicity. My view believes that the money is not neutral, that money is not a substitute for goods, that not all goods are substitutes for each other and that most importantly markets do not trend toward equilibrium when left by themselves. If, you want more reasoning of the previous point I would be happy to talk about them. However the real point of this blog is to talk about the fatal conceit of Austrian, classical or in most cases conservative economic theory, according to me. Generally, I get questions about how I can still believe in Keynesian theory after these past few economic collapses and points about how we would be better without regulation and under Austrian economic theory. So, take this as my answer to why I do not buy Austrian economic thought, this will be mixed with a bit of human nature philosophy, some political philosophy and a variety of other fun bits. To finish this introduction I would like to say that all of the next part is based on my reading, my experience and my opinion, I do not mean to be insulting to anyone and if you find yourself as an Austrian then I mean no harm.

Generally, when I get into discussions with people of the Austrian persuasion they are also of a Lockian belief of human nature and have a strong desire for freedom from any oppressor. They believe that when left to their own devices that people and markets will work to the most efficient and beneficial outcome and that government is messing everything up. They believe in moral objectivism and the ability for anyone to be able to pull themselves out of problems they themselves didn’t create, with hard work of course. Finally, they usually say that people in the lower classes and in OWS are just whining about things and that they should go get jobs. Now that we have classified me vs. the masses we can get onto the meat of my argumet.

The Austrian school of economics believes that when people have the opportunity to act as entrepreneurs without government intervention then profits will arise. These profits will go to consumption of goods in the economy and savings. These savings will pay for modest investments and then our economy will grow as investments lead to increases in technology. The profits that fund this all will come from people taking advantage of knowledge that others lack and thus it is a competition for knowledge and the action of competing is rewarded with profits. These profits are competed away and the price mechanism works to balance the economy. They say that the economy is people and that people will work to a better societal end. For a fun and easy crash course then look up the Hayek vs Keynes rap battles from Econ Stories on Youtube. This view is predicated on the fact that there is a market equilibrium, that people don’t take advantage and enslave others, that people don’t speculate and that people don’t cheat. This aligns with Locke’s positive view of human nature, where people have natural rights, gain property through labors and act in a way that is beneficial to everyone when they create things. This is a highly idealized view of human’s interaction in the economy, with each other and as a society and it leaves itself open to the fatal flaw that it is just blatantly incorrect when it comes to people. I will make this point with both political thought and economic thought, in that order.

To start my critique with an example I would like to point out the island of Saipan. My friend and fraternity brother Matt is from Saipan and told me the story of what happened during the islands period of free market, Austrian capitalism. He said that there was huge human rights injustices, sweatshops, huge society inequality, a small rich class and a huge impoverished class. This came about because the rich acted in ways that benefited only only themselves and they took advantage of everyone else. This is your example of Austrian economics, this is your idealized system and this is the outcome of the system that is spread like propaganda in the conservative party. The Austrian view makes the mistake of believing that at their core humans are “good” creatures. In our current economic system we can see a similar situation where the 1% has enslaved the rest of the population through debt, consumerism addictions, corrupt politics, blatantly lying to people and shifting blame with sensationalist media.

Instead I offer a different, and much more realistic economic and political idea. One that was sung by brilliant men before me such as Hobbes, Keynes, and Minsky. People are selfish, and violent creatures that work in order to help themselves and themselves only. In Hobbes words the state of nature is the “war of all against all.” Current day economics is a system that allows people to enslave others with knowledge, debt and contracts. Our political system allows for the corruption of our representatives to go unnoticed because it never gets told. Our “regulation” agencies employ the executives from the firms that they are supposed to protect us from. The rich get richer and the poor get poorer. The financial markets take advantage of the average person and get rich while they legally ruin others. All while people call for DEREGULATION!!! I say that we have had enough deregulation, we have had enough of the same old business in Washington, we have had enough of lobbyist groups, we have had enough of the revolving door policy in the FDA, EPA, SEC, and other agencies. We need to protect people from themselves and others. We fight wars against enemies that we create while the public gets taken advantage of by wall street executives. WE NEED A GOVERNMENT FOR THE PEOPLE, BY THE PEOPLE, NOT FOR THE CORPORATIONS BY THE LOBBYISTS.

Post-Keynesians paint a picture of economic policy that emphasizes the importance of actual functioning of people in the economy. “The theoretical foundation of Post Keynesian economics is the principle of effective demand, that demand matters in the long as well as the short run, so that a competitive market economy has no natural or automatic tendency towards full employment. Contrary to the views of New Keynesian economists working in the neo-classical tradition, Post Keynesians do not accept that the theoretical basis of the market failure to provide full employment is rigid or sticky prices or wages.” The idea that the economy will fix itself is naive and foolish. Minsky does an excellent job of expressing why this is the case when he is talking about the Financial Instability Hypothesis. He says that in a small, basic economy such as a marketplace then the ability for the market to regulate itself and come to equilibrium might be possible. However in the US was have a complex economy with highly advanced financial systems, cutting edge technology and rapidly changing predictions and outcomes. In an economy with advanced financial institution especially Minsky says that there is no trend to equilibrium, instead there is a trend for the investors to pursue profits even if it is not really advisable. This provides a much more realistic view, we see that in all of the large financial collapses there was a draw to over-inflate and speculate about investments. As Minsky outlines in his theory, this is a perfectly normal activity in the economy and that it will inevitably cause collapse. It is not over-regulation, or exogenous shocks that collapse our economy, it is the people that are left uncontrolled to play with it. This is the main basis of why I say that Hobbes was right, we see that people act for themselves to the detriment of others all the time, especially when it comes to the economy. I challenge anyone that believe in Austrian economics to show me an example of where it worked for a long period of time in a economy that is as complex as ours. Till that day I will agree that we need our government intervention and regulation to protect the people from the fraudulent investors that manipulate the system. We either need regulation, or a society shift to change this and because I doubt the second is anywhere near close to happening then I will side with the first. Our regulation protects your children from child labor, from poverty, from human rights violations, from class stratification and from nearly every injustice that you can imagine.

This post is for myself to voice opinions and questions. I feel like these writings of great men can be the ground for a change in society. It is not that I trust this government, it is that I trust the need for government in our current world. In all honesty I would love to clean house of Washington and all the regulatory agencies and start with new minds, fresh ideas, no lobbyists, common sense, good will and realistic thoughts. We need more people with conviction, drive and strong morals, not people that love politics and take lobbyist bribes. We need a change in our politics, our economics, our philosophy/religion, our foreign policy, our education, or ethics and most importantly ourselves.

For those with little time, TL:DR- Austrian economics is based on ideals of human nature that are inconsistent with reality and therefore is wrong. Post-Keynesianism is based on much more realistic grounds and is much more proven and therefore a better system. Our politics and government is currently terrible and we need a new government under post-keynesian, Hobbesian and fresh ideals to truly progress.

My moral and spiritual views are based on a few main points. First being my rejection of organized religion. This stems from 18 years of being dragged to church and absolutely despising it. The idea that God has a relationship with every one of us yet all we have to do is give up 2 hours on a Sunday and say empty words is ridiculous. If anything a relationship with god is life any other, one that takes time, effort, drive and care. Not something that you can get out of a one size fits all service. I am a spiritual person; I believe in something deep enough that it fills the hole of a religion. This is the existentialist philosophy. In existentialism there are 2 main tenants, they are as follows; you cannot overcome subjectivity, and existence precedes essence. These tenants significantly changed my life. They taught me personal responsibility and the fact that you are in control of everything in your life. They have also shaped my moral views in that no one’s morals are objective given that nothing is objective, no one’s morals are better than anyone else’s and that each person’s morals will be different. This was learning of my own choice, with my own life experiences and without the need of God, the Bible or any other religion. You can have morals without religion; in fact I find that without religion people are much more tolerant.  Morals are nothing more than the actions that you consider right or wrong, not what IS right or wrong, but what YOU THINK is right or wrong. This means that no one has the right to tell me that my actions are wrong, no one has the right to make me believe their morals against my will and absolutely no one has the right to tell me that my morals are wrong or that their morals are better. I don’t care what people believe, I might disagree but I will never say that you don’t have the right to believe that. I will never tell anyone that their morals are inferior; all I can say is that according to my moral beliefs, their actions are wrong. This is much different than the religious view that morals are objective and that things can BE wrong. This is where I find my disgust with the church. Who are you to tell me that your morals are better than mine when you don’t even give enough time to read other ideas, you preach about Jesus’s love while telling homosexuals that they are an abomination. You tell me that my morals are wrong when you believe in unknowable being that only “exists” based on your faith. Come down from your pedestal people, you are human with your own ideas and I can assure you that if your God exists then he would much rather have the tolerant and caring atheist than the intolerant bigoted fundamentalist Christian.  My life is ruled by a strict set of morals that I found, learned and believe myself. They are based off of my own logic, life experiences and philosophical beliefs. I don’t impose them on anyone; however I would invite anyone to learn about them. This doesn’t make me a bad or amoral person because I don’t believe in God. There have been a lot more killing in God’s name than in a secular beliefs name. Right and wrong is decided by a person for themselves and does not extend to anyone else. Stop legislating, mandating, interpreting, preaching, deciding, and decreeing your morals as objective because all you do is exercise tyrannical control of people against their will. At the end of the day what makes more sense, the fact that our earthly existence is all we have and we have the ability to shape it or that there is a unknowable being in the sky with a zombie son that can raise other dead people, walk on water and cure blindness? I ask you to have morals, have beliefs but put time into your beliefs and so help me don’t push your beliefs on anyone else.