PODCAST: "Hexapodia" Is þe Key Insight XXI: Last Exit Off þe Highway to Serfdom?

"Hexapodia" Is the Key Insight: by Noah Smith & Brad DeLong

Key Insights:

* “This time, for sure!…” Are the Democrats Bullwinkle Moose or Rocket J. Squirrel “that trick never works!” in hoping that they can get a high-investment high-productivity growth full-employment high-wage growth economy, and then the political life for true equality of opportunity will be doable?…

* Milton Friedman is of powerful historical importance as one of the principal creators of our still-neoliberal world, but his ideas now—whether monetarism, or his assumption that all political organizations and policies everywhere and always are inescably rent-seeking grifters—are now of historical interests only…

* There will be many future missteps in our search for the road to utopia…

* The old world is dying, and the new world struggles to be born, so now is a time of monsters…

* Noah should really listen to and read Jeet Heer…

* It would be silly not to recognize the political peril of this moment, but also not to recognize its democratic potential: pessimism of the intellect, yes; but also optimism with the internet…

* We are coquetting with the modes of expression of Antonio Gramsci today, aren’t we?

* Hexapodia!

References

* David Beckworth (2010): Case Closed: Milton Friedman Would Have Supported QE2 <https://macromarketmusings.blogspot.com/2010/11/case-closed-milton-friedman-would-have.html>

* Zach Carter:The Price of Peace: Money, Democracy, & the Life of John Maynard Keynes <https://www.zacharydcarter.com>

* Zach Carter:The End of Friedmanomics <https://newrepublic.com/article/162623/milton-friedman-legacy-biden-government-spending>

* Brad DeLong (1999): The Triumph? of Monetarism <https://delong.typepad.com/delong_long_form/1999/10/j-bradford-delong-the-triumph-of-monetarism.html>

* Brad DeLong (2001): The Monetarist Counterrevolution <https://web.archive.org/web/20010517134105/http://www.j-bradford-delong.net/TotW/counterrev.html>

* Brad DeLong (2015): The Monetarist Mistake <https://www.project-syndicate.org/commentary/friedman-ideas-great-recession-by-j--bradford-delong-2015-03>

* Brad DeLong (2019): “Passing the Baton”: The Twitter Rant <https://twitter.com/delong/status/1100166150845939712>

* Brad DeLong & Zack Beauchamp (2019): “Passing the Baton”: The Interview <https://www.vox.com/policy-and-politics/2019/3/4/18246381/democrats-clinton-sanders-left-brad-delong>

* Brad DeLong (2019): “Passing the Baton”: The Interview: Comment<https://www.bradford-delong.com/2019/03/passing-the-baton-the-interview.html>

* Brad DeLong (2007): Right from the Start?: What Milton Friedman Can Teach Progressives <https://web.archive.org/web/20070513134239/http://democracyjournal.org/article.php?ID=6514>

* Brad DeLong (2017): Helicopter Money: When Zero Just Isn’t Low Enough <https://www.milkenreview.org/articles/helicopter-money-when-zero-just-isnt-low-enough>

* Milton Friedman (2000): Canada & Flexible Exchange Rates <https://www.bankofcanada.ca/wp-content/uploads/2010/08/keynote.pdf>

* Milton Friedman & Rose Director Friedman: Free to Choose: A Personal Statement

* John Maynard Keynes (1919): The Economic Consequences of the Peace

* John Maynard Keynes (1926): The End of Laissez-Faire

* John Maynard Keynes (1926): A Short View of Russia

* John Maynard Keynes (1936): The General Theory of Employment, Interest & Money

* John Maynard Keynes (1931): An Economic Analysis of Unemployment <https://www.bradford-delong.com/2004/07/the-mammon-of-unrighteousness.html>

* Jay Ward & co.: The Rocky & Bullwinkle Show <https://www.youtube.com/results?search_query=rocky+and+bullwinkle+show>

&, of course:

* Vernor Vinge: A Fire Upon the Deep <https://books.google.com/books?id=fCCWWgZ7d6UC>

Zach Carter:The End of Friedmanomics <https://newrepublic.com/article/162623/milton-friedman-legacy-biden-government-spending>:

When he arrived in South Africa on March 20, 1976, Milton Friedman was a bona fide celebrity…. Friedman was a bestselling author and no stranger to fine living. But he was astonished by both “the extraordinary affluence of the White community” and the “extraordinary inequality of wealth” in South Africa. Friedman was not a man to scold opulence, and yet he found the tension permeating apartheid South Africa palpable in both taxicabs and hotel ballrooms. The “hardboiled attitudes” of Mobil chairman Bill Beck and his friends were difficult for him to endure….

All of which makes a contemporary reading of Friedman’s Cape Town lectures… harrowing.… His first speech was an unremitting diatribe against political democracy.… Voting, Friedman declared, was inescapably corrupt, a distorted “market” in which “special interests” inevitably dictated the course of public life. Most voters were “ill-informed.” Voting was a “highly weighted” process that created the illusion of social cooperation that whitewashed a reality of “coercion and force.” True democracy, Friedman insisted, was to be found not through the franchise, but the free market, where consumers could express their preferences with their unencumbered wallets. South Africa, he warned, should avoid the example of the United States, which since 1929 had allowed political democracy to steadily encroach on the domain of the “economic market,” resulting in “a drastic restriction in economic, personal, and political freedom.”…

Friedman did not subscribe to biological theories of racial inferiority.… The program Friedman prescribed for apartheid South Africa in 1976 was essentially the same agenda he called for in America over his entire career as a public intellectual—unrestrained commerce as a cure-all for inequality and unrest.

That this prescription found political purchase with the American right in the 1960s is not a surprise. Friedman’s opposition to state power during an era of liberal reform offered conservatives an intellectual justification to defend the old order. What remains remarkable is the extent to which the Democratic Party—Friedman’s lifelong political adversary—came to embrace core tenets of Friedmanism. When Friedman passed away in 2006, Larry Summers, who had advised Bill Clinton and would soon do the same for Barack Obama, acknowledged the success of Friedman’s attack on the very legitimacy of public power within his own party. “Any honest Democrat will admit that we are now all Friedmanites,” he declared in The New York Times.

No longer. In the early months of his presidency, Joe Biden has pursued policy ambitions unseen from American leaders since the 1960s. If implemented, the agenda he described in an April 28 address to Congress would transform the country—slashing poverty, assuaging inequality, reviving the infrastructure that supports daily economic life, and relieving the financial strains that childcare and medical care put on families everywhere. It will cost a lot of money, and so far at least, Biden isn’t letting the price tag intimidate him. “I want to change the paradigm,” he repeated three times at a press conference in March…

Zach Carter:The Price of Peace: Money, Democracy, & the Life of John Maynard Keynes <https://www.zacharydcarter.com>:

The school of thought that has come to be associated with the name of Keynes no longer has much to do with the moral and political ideals Keynes himself prized. Keynesianism in this broader sense was for a time synonymous with liberal internationalism—the idea that shrewd, humane economic management could protect democracies from the siren songs of authoritarian demagogues and spread peace and prosperity around the globe….

The key to realizing that international vision was domestic economic policy making. International political stability would be achieved—or at least encouraged—by alleviating domestic economic inequality. State spending on public works and public health could be combined with redistributive taxation to boost consumer demand, while establishing an environment in which great art could thrive. In his maturity, Keynes offered radicals a deal: They could realize the cultural and moral aims of liberationist revolution—a more equal society and a democratically accountable political leadership—while avoiding the risks and tragedies inherent to violent conflict. He claimed that the social order established by nineteenth-century imperialism and nineteenth-century capitalism was not so rigid that it could not be reformed rather than overthrown.

After nearly a century on trial, this Keynesianism has not embarrassed itself, but neither has it been vindicated. The New Deal, the Beveridge Plan, and the Great Society fundamentally reordered British and American life, making both societies more equal, more democratic, and more prosperous. In the 1930s, black poverty in the United States was so high that nobody bothered to measure it. By the 1950s, it was over 50 percent. Today it is about 20 percent. This is progress. But it is decidedly not the world promised by the Communist Party in the 1930s, when it denounced Franklin Delano Roosevelt as a tool of the business elite. It cannot compete with the dreams of liberation presented by Black Power revolutionaries of the 1960s….

Keynesians can persuasively argue that today’s tragedies are the product of a failure to fully implement Keynesian ideas rather than a failure of Keynesian policies…. For the past thirty-five years, the United States and Great Britain have mixed Keynesian disaster management—bailouts and stimulus programs—with the aristocratic deregulatory agenda of Hayekian neoliberalism.

It is appropriate for neoliberalism to take most of the blame for the political upheavals of the twenty-first century. The neoliberal faith in the power of financial markets bequeathed us the financial crisis of 2008, and the fallout from that disaster has fueled dozens of hateful movements around the world. While the American commitment to Keynesian stimulus after the crash was inconstant, Keynesian ideas were simply abandoned throughout most of Europe…. The economic ruin… has energized neofascist political parties, which now threaten the political establishment…. But pointing the finger at neoliberalism raises uncomfortable questions for Keynes and his defenders. Why has Keynesianism proven to be so politically weak, even among ostensibly liberal political parties and nations? The Keynesian bargain of peace, equality, and prosperity ought to be irresistible in a democracy. It has instead been fleeting and fragile. Keynes believed that democracies slipped into tyranny when they were denied economic sustenance. Why, then, have so many democracies elected to deny themselves economic sustenance?…

This is a dark time for democracy—a statement that would have been unthinkable to U.S. and European leaders only a few short years ago. It took decades of mismanagement and unlearning to manufacture this global crisis, and it cannot be undone with a few new laws or elections.

Mainstream economists now speak openly of moving “beyond neoliberalism”…. Keynesianism in this purest, simplest form is not so much a school of economic thought as a spirit of radical optimism, unjustified by most of human history and extremely difficult to conjure up precisely when it is most needed: during the depths of a depression or amid the fevers of war. Yet such optimism is a vital and necessary element of everyday life…. A better future was not beyond our control if the different peoples of the world worked together.… “Were the Seven Wonders of the world built by Thrift?” he asked readers of A Treatise on Money. “I deem it doubtful.”… In the long run, almost anything is possible.

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