Archive for August, 2009

Via Paul Kedrosky, the trailer is out for Michael Moore’s new movie, to be released October 2nd, Capitalism: A Love Story. It’s hard for me to not enjoy a trailer that involves MIA’s Paper Planes.

On a related note, I’m genuinely surprised how seriously Michael Moore is taken at this point in time. I don’t say that from a moderate perspective, because I really enjoy his work. I just think that it’s unusual for an agitator to gain so much currency in the mainstream. Even people in the center will talk about Sicko with regards to health care reform. That said, I’m hoping this movie is well done.

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I recently found an interesting textbook, Reintroducing Macroeconomics: A Critical Approach by Steven Mark Cohn. It came it out in December 2006.

This lively introduction to heterodox economics provides a balanced critique of the standard introductory macroeconomic curriculum. In clear and accessible prose, it explains many of the key principles that underlie a variety of alternative theoretical perspectives (including institutionalist economics, radical economics, Post Keynesian economics, feminist economics, ecological economics, Marxist economics, social economics, and socioeconomics). Because the book’s structure parallels the chapters and subject matter presented in a typical introductory macroeconomics textbook, Reintroducing Macroeconomics provides readers with a running commentary on the standard approach, while simultaneously introducing them to a broader range of ideas about the causes and appropriate policy responses to a wide range of common economic problems.

Just briefly scanning the Google Book preview, I noticed that it even included quite a bit on the auctioneer, that critical guarantor of market equilibrium who so few of us ever meet in our economics education. Using this book as a companion to the mainstream textbook would certainly have made macroeconomics much more interesting and we might have actually had some discussion or debate during class.

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There may be no such thing as a free lunch, according to neoclassical economists, but now there are free textbooks.  And, ironically enough, many of them are for Principles of Economics courses.  From Epicenter:

What did you do this summer? Flat World Knowledge stayed busy on campus and now has 40 times as many students and more than 10 times the colleges using their freemium, open-source digital textbooks. And they did it the old-fashioned way — one professor at a time.

After a sort of beta earlier this year, Flat World is set to announce on Thursday that over 40,000 college students at more than 400 colleges are going to be using their digital, DRM-free textbooks in the Fall semester, up from 1,000 in 30 colleges in the Spring.

More on Flat World Knowledge and free textbooks here and here, with a little bit on the economics of the textbook industry:

In a nutshell, there is a huge, inelastic demand for college texts, even though textbook prices are high. Because of this there is a lot of piracy and a robust secondary market for textbooks — but not for long, because they are updated every couple of years, rendering old editions virtually worthless.

It’ll be interesting to watch this trend unfold…

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Via Mark Thoma, Richard Posner points to another rejoinder to the letter from two LSE economists, which apologized to Her Majesty but essentially kicked the can down the road. I posted a few weeks back about Thomas Palley’s response to the Besley/Hennessey letter.

Now, in the new rejoinder, ten British and Australian economists point out in a similar fashion the complacency reflected by Besley/Hennessey. They first state that the letter is flawed because it, “fails to acknowledge any defiency in the training or culture of economists themselves.”

They point out that although many Nobel laureates have identified the problem of increased mathematization and model fetishism, “too little has been done to rectify this problem.”

In summary,

Models and techniques are important. But given the complexity of the global economy what is needed is a broader range of models and techniques governed by a far greater repsect for substance, and much more attention to historical, institutional, psychological, and other relevant factors.

Maybe I’m just in a good mood, but the chorus is growing louder for real change in economics disciplines. Perhaps a tidal change might save the heterodox department at Notre Dame, or make earning a PhD from UMass Amherst “respectable.” Or maybe not.

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In MRZine, Simon Butler reviews John Bellamy Foster’s new book, The Ecological Revolution: Making Peace with Our Planet. Butler begins,

The ecological crisis is not simply the result of poor planning or bad decisions.  Nor is it an unforeseeable accident.  It’s the inevitable outcome of an unjust economic and social system that puts business profits before all else — even as it undermines the natural basis of life itself.

Any neo-Marxian take on pretty much anything is going to present some (should I say?) inconvenient truths, and by Butler’s account, it seems Foster’s book it no different.

The Ecological Revolution is a call for urgent action and an intervention into the debates about the kind of action needed to win this “race.” […]

The upshot is that two distinct visions of ecological revolution have emerged.

The first tries to paint business as usual economics green.  The second, following Che Guevara’s maxim, holds it must be a genuine eco-social revolution or it’s a make-believe revolution.

“The conflict between these two opposing approaches to ecological revolution,” writes Foster, “can now be considered the central problem facing environmental social science today.”

Probably my favorite parody of the first approach is found in an episode of 3o Rock, in which General Electric attempts to push a corporate-friendly “green” message with the character Greenzo, who turns out to be a more rogue, deep green version of what was expected. Of course, beneath the surface of this first approach is a “green industrial revolution,” in which,

the driving force of sustainable change is not the goal of preserving life, improving society, or allowing for the full development of human potential, but the profit motive…

All assume that economic growth, the expansion of markets, and the unlimited accumulation of capital can continue…

As a way to deal with the planetary emergency, such market-based responses are absurd, irrational, dangerous, self-defeating, and destined to fail.  They have also been warmly welcomed by the world’s capitalist governments and provide much of the basis of false responses to climate change such as carbon trading and “clean coal.”

John Bellamy Foster aptly sums up the capitalist economics of a market-based green industrial revolution as “the economics of exterminism.”  He advances an alternative approach that puts ecological concerns above capital accumulation.  We need “a more radical, eco-social revolution, which draws on alternative technologies where necessary, but emphasizes the need to transform the human relation to nature and the constitution of society at its roots.”

Probing socio-economic relations, Foster writes,

‘At the planetary level, ecological imperialism has resulted in the appropriation of the global commons (i.e. the atmosphere and the oceans) and the carbon absorption capacity of the biosphere, primarily to the benefit of a relatively small number of countries at the center of the capitalist world economy.’

Foster also draws on two concepts from Marx:

The treadmill of production refers to capitalism’s core impulse to expand production without regard to natural limits to growth set by the biosphere.  This impulse makes the process of capital accumulation inherently unsustainable and anti-ecological…

The metabolic rift refers to Marx’s theory that capitalist production necessarily creates a sharp break in the relationship — the metabolism — between nature and human society.  Marx used the concept of metabolism to describe the complex and co-dependent union between humanity and the environment.

So what’s the key Marxian insight for ecology?

Unlike mainstream economic approaches, Marxists hold that private ownership of natural resources is the major barrier to dealing with environmental problems.  In the third volume of Capital, Marx even compared the relationship between nature and humanity under capitalism to slavery.

And the goal?

“The goal,” Foster says, “must be the creation of sustainable communities geared to the development of human needs and powers, removed from the all-consuming drive to accumulate wealth.”

So it’s not surprising that Foster writes that the solution “is now either revolutionary or it is false.”

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If It Ain’t Broke…


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