HS: Thank you Lars, this has left us NO-WHERE-and will therefore lead us and all associated with us and this “Science” to NO-WHEREISM. It has long gone past the stage of neither here, no there.
Me: Even though Lars levels a well deserved critique of Krugman, you are correct. All current theories are merely perturbations of the orbit of Mars via imaginary epicycles. What is required is the fundamental breakthrough known as a paradigm change, and that is characterized by inversions of current realities like from monetary scarcity to abundance, from inflation to deflation, from inherently halting, conflicted and confused unworkability to rationally and intelligently crafted free flowingness.
And all it takes for such change is a new look in a place no one is currently looking, and a new realization about an economic significance that exists there.
E: Thanks for your excellent work on this, Asad, and I am distributing all three parts. I will simply offer that we can identify several elements in the development of freemarket neoliberalism as the dominant political economic philosophy since the 70s:
1. The publication of The Powell Memo in 1972, a document commissioned by the U.S. Chamber of Commerce that is a roadmap that lays out the institutional development needed to effect the corporate domination;
2. Pat Buchanan’s speech during the 1988 Republican Convention that declared cultural war on those of us who oppose this development;
3. The relationship between the Koch Brothers (and others) and the work of James Buchanan (no relation to Pat), as described in Nancy MacLean’s fine book, Democracy in Chains.
I could include some other stepping stones, such as the work of The Project for a New American Century, but these three are the most noteworthy in my view.
I will add that, although I agree with your timeline, my time at Berkeley in the 1960s showed me that far too many political liberal economists there were already hooked into Friedman’s freemarket ideology, even as they taught Samuelson’s version of Keynes.
Me: Yes, this is all accurate history. One needs to ask oneself
1) who/what is the behind the scenes power that benefits from the return to Chicago School capitalist theories and
2) why was it so easy to morph Keynesianism into the neo-classical “synthesis”
And here are the answers:
1) The business model of Finance with its monopolistically dominating paradigm for the vehicle and form in which money is distributed, namely Debt Only. Of course multi-national corporations with global reach are complicit with Finance as they stand partially above that paradigm.
2) Keynesianism was only a reform. In fact it was Finance’s fall back position against another contemporaneously burgeoning world wide movement that was way ahead of its time, but would have probably been overturned as well because it still had the taint of general equilibrium theory. Innovating that movement’s policies plus adding a strategically placed third one and a structural change elevates them to paradigm changing status.
Reforms can be undone/reversed. Only a paradigm change is truly progress because as history shows us EVERYTHING adapts to a new paradigm NOT the other way around.