Comprehensive incomprehensibility of thought
| by Kumar David
(June 10, 2012, Colombo, Sri Lanka Guardian) Readers, no doubt, are bored hearing that “the Gods first make mad those they wish to destroy,” perhaps even dubious. Why dubious? Lanka’s political establishment is palpably loony, and populated by knaves to boot, but booting it out does not seem to be imminent. Ah pity, but I must move on. My column today is about hair-raising conflicts between the “great” economists of the bourgeois world (Nobel Prize winners included) tearing out each other’s hair in diatribes about the global state of the dismal science.
The much hyped macroeconomists of the capitalist world are: Nobel laureate Robert Lucas (University of Chicago), Robert Barrow (Harvard), Nobel laureate Paul Krugman of Princeton, Brad DeLong (Berkeley), Willem Butler (LSE), Michael Farma (Chicago), two more Nobel prize winners – Joseph Stiglitz (Columbia) and Myron Scholes (a shady wheeler-dealer convicted of $40 million tax evasion as partner in LRMC – the infamous outfit that crashed in 1998). I quote how they describe each other in public and in print.
“Making truly boneheaded arguments;” “making ancient and basic analytical errors all over the place;” the past 30 years of teaching at American and British universities are “a costly waste of time;” “the Dark Age of macroeconomics;” macroeconomics of the past 30 years was “spectacularly useless at best, and positively harmful at worst;” and more. This is what these mighty minds fling at each other. It matters little which was said by whom against whom; the whole lot are blabbering like babes. In the shadows of the New Depression, these prize-fighters of capitalism have, in their own words, become a blithering cacophony.
That sacred mouthpiece of bourgeois thought, the Economist, surmises that:
“These internal critics argue that economists missed the origins of the crisis; failed to appreciate its worst symptoms; and cannot now agree about the cure. In other words, economists misread the economy on the way up, misread it on the way down and now mistake the right way out.” (Of course the Economist knows not a whit what Marxists have been saying for a decade). It adds: “(others) accuse economists like Mr. DeLong and Mr. Krugman of falling back on antiquated Keynesian doctrines – as if nothing has been learned in the past 70 years. Messrs DeLong and Krugman, in turn, accuse economists like Mr. Lucas of not falling back on Keynesian economics – as if everything has been forgotten in the past 70 years!” Such is the disarray among the towering eggheads atop capitalism’s Himalayan heights.
Krugman’s soft talk – Milios’ hard talk
The latest round in bedlam was Paul Krugman on BBC World’s Hardtalk in late May. Krugman shuffled along on two legs, his left foot lamenting the miserable state of the underprivileged in the ‘Greatest Nation on Earth,’ while a deranged part of his mind followed his right foot failing to comprehend that everything was amiss with global capitalism. His is a serious case of certifiable schizophrenia. Here in a nutshell is his position: The economy is not fundamentally flawed; there is no need for this pain; we face political and intellectual problems (reluctance to make necessary hyper-Keynesian decisions) not an economic one; there is enormous psychological fear and if leaders can overcome it, all can be put right soon. His solution is that the state should borrow more, spend more and help the economy grow out of trouble; then debt can be quickly repaid.
Then quite blithely he goes on to say that he supports the Occupy Movements; there is great suffering of millions (in America mind you); “we” must not capitulate to markets; the IMF, ECB and the mainstream capitalist economists are all wrong; and “we” must not accept the so called “normal” which is running the economy to ruin. How in pluperfect heaven does he say this, and at the same time insist that the fundamentals of the global capitalist economic order are fine? Do not the two lobes of his brain clash like a thunder clap?
So it is true, the Gods are first making mad the oracles of bourgeois economics (Marx would call them vulgar economists to distinguish from greats like Smith and Ricardo) before finishing off the capitalist system. None of the above is made up by me; it’s all on record.
Outcome hard to predict
Another BBC Hardtalk programme featured Yiannis Milos, chief economic advisor to Alexis Tsipras, leader of Syriaz and Greece’s next prime minister if it secures a plurality in the 17 June parliamentary elections – opinions pools are contradictory, the outcome is hard to predict. Milos was insistent that if the left wins and repudiates the austerity programme forced on Greece by Merkel and Brussels, it would not be kicked out of the Eurozone; on the contrary the great financial powers of Europe will be compelled to renegotiate the pact to forestall a Europe-wide meltdown. I think he has a point, but first the Greek people must have the nerve to stare down Europe’s bullies and elect the left. If the pro-austerity right wins, then it will be total meltdown and social anarchy in Greece within two years, unless European capitalism backs down anyway. Greece’s problem is not illiquidity, but insolvency, austerity cum lending cannot solve it, a structural overturn is inescapable.
True the downturn in Europe is detrimental to Lanka’s exports. However, comparing with available US data, I guess there is some $2 to $3 trillion in free liquidity floating in the European corporate sector, un-invested due to the crisis in business confidence. Hence there is a rich pool available. Lanka’s government is seeking $1.75 billion as its 2012 FDI target and the pool it can tap into is huge. Devaluation has dropped the value of the rupee by 20% raising its attractiveness for foreign investors. Prima facie $ 1 to $2 billion should be a cake walk, but I deem it an uphill task except perhaps $200+ million in the tourism sector. My reservations continue to be the law and order scene, and interference with the judiciary. Conditions simply do not invoke confidence, especially when it is indisputable that it is the forces of the state that are responsible for the butcher’s axe and bloodied beak.
Who finds the heifer dead,
and bleeding fresh,
And sees fast by a butcher
with an axe,
But will suspect ‘twas he that
made the slaughter?
Who finds the partridge in the
puttock’s nest,
But may imagine how the bird
was dead,
Although the kite soar with
unbloodied beak?
Foreign investors are no less able than the Earl of Warwick in Henry VI, Part 2, to draw self-evident conclusions. It’s no use saying that unless the government does something about law and order foreign investors will hold back; that’s an oxymoron. For intrinsic reasons, deeply ingrained in its own structure and nature, this government cannot. That’s the long and the short of it.
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