Friday, December 25, 2009

Michael Hudson vs Paul Krugman

Michael Hudson has (briefly) broken into the public debate via a comment from Paul Krugman of the New York Times.

Here is a taste of the radical view that ever-so-momentarily hits the spotlight:

To answer this question, my book describes the "intellectual engineering" that has turned the economics discipline into a public relations exercise for the rentier classes criticized by the classical economists: landlords, bankers and monopolists. It was largely to counter criticisms of their unearned income and wealth, after all, that the post-classical reaction aimed to limit the conceptual "toolbox" of economists to become so unrealistic, narrow-minded and self-serving to the status quo. It has ended up as an intellectual ploy to distract attention away from the financial and property dynamics that are polarizing our world between debtors and creditors, property owners and renters, while steering politics from democracy to oligarchy.

In this article Hudson goes on to point out one of the oddest and most characteristic aspects of neo-classical economics, that propositions don't have to correspond to reality, they just have to be internally logically consistent.

In the past, Hudson has confidently predicted that neo-liberalism is dead as a result of the GFC, but I prefer to agree with Gaffney that it aint dying anytime soon. The corpse will be patched up and shoved out again for consumption by new generations of students.

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