Tripping On Steve Keen

The belief that a capitalist economy is inherently stabilising is also one for which inhabitants of market economies may pay dearly in the future.
Steve Keen, Debunking Economics, p. 213

The Oracle of Ottawa is off his routine. The usual subject matter has been getting pretty boring. And on top of that the Canadian public has finally clued in and it is all back on track. My work on those recent subjects are all but done now.(See earlier postings...) The truth of the matter is that the Oracle of Ottawa has been side-tracked by a most amazing book written by one Steve Keen, of the University of Western Sydney, way down under, called Debunking Economics...

Steve Keen - equilibrium is bunk!

Frequent fliers to the Economy of Media know that the Oracle of Ottawa loves his books and is most interested in economics. And that he has read all the major "classical" economists texts in their unabridged entirety. Including the General Theory by Keynes in a very, very, early edition. Why the Oracle of Ottawa even read all the small print, how sick is that? And he still can't understand why every one says it is a "difficult book"? A lot of the trouble was due to war time paper and printing restrictions. The Oracle of Ottawa has always thought that Keynes was always a very good read!

But over the years the Oracle of Ottawa has been getting that anxious nervous feeling that a lot of what is taught to young economists is all very, very, well, wrong. This feeling got worse and worse as the Oracle of Ottawa put together a rather nice pile in a stock portfolio over the years, by breaking all the rules that are taught to all the up and coming portfolio mangers. According to the text books the Oracle of Ottawa has just been really lucky, so far...

But according to Steve Keen the Oracle of Ottawa may just be a very early adaptor! All the Oracle of Ottawa can tell you is that if you read one economics book this year make it Debunking Economics! This guy could be the most important economist in our lifetime. This guy is as important as Adam Smith, Karl Marx and Maynard Keynes! So that of course means that he will never win the Nobel Prize for economics, because he is too right! But the upside is that he will be famous forever!

The part where he utterly demolishes the Efficient Market Hypothesis is worth the ten times the price of the book! And I am sure that Warren Buffet would back him up on his conclusions... The Oracle of Ottawa wasn't lucky at all, he was just and truly freaking brilliant!  

And he is a very relaxing guy to listen to, unlike most stuffy pedantic Nobel Laureates. Watch this guy, he is going to be very important and world famous...

Globalization Free Trade Fail

The fox has been in the henhouse for many years, but now the coon is coming.
Hunter S. Thompson, Better Than Sex, p. 88

God! What a haul it was! Finally finished reading George Ritzers monster book on globalization, entitled Globalization - A Basic Text. Yes, dear reader,  the Oracle of Ottawa read it so you wouldn't have to. Drier than all the sand dunes in Libya. But in conjunction with the Oracle of Ottawa's Thinking About Thinking Project, I think I have made several breakthroughs! You don't need the Oracle of Ottawa to tell you that there is really something fishy with this globalization crap. When you hear the knuckle dragging social Darwinist's of the Conservative Party of Canada going on about its wonders you know you have to be worried. And when you are sitting at home in, say, Southern Ontario, waiting for your first unemployment check, that you are not going to get, because your workplace just left for Mexico or China without you, then you will know that globalization is a crock of crap. How did it all come to this?

Milton Friedman - Fooled ya!

It is all a very convoluted and twisted tale. The two names you will hear the most often are Adam Smith and David Ricardo. The right wing Chicago School economist will go on endlessly about the benefits of the Invisible Hand as first written about by Adam Smith, then this will lead invariably to a long dissertation on the brilliance of Comparative Advantage. Now the Chicago School is big and unquestioned ever since Milton Friedman did his big thing in Chile, you know that miracle story? But when you really look at the whole thing closely today, you see it was all an engineered set up. It seemed to be old Milty's big rush to get into the Ivy League. Never happened, alas. Now you will hear about the miracle of the Chicago Boys, but did you hear about the bits about the Ford Foundation and the United States State Department? Geez, you soon come to realize that once with the full unimpeded power of the United States of America you could make darkness happen at noon! Let us just say that the playing field was altered somewhat before the said great experiment even started! And of course that coup thing had nothing to do with the "successful" outcome...

We will get it all back Comrade....

Well, the Oracle of Ottawa has discovered two new logical fallacies that allow this crap to be continued to be sold. The first fallacy I call Era Displacement. For example comparing the workings of comparative advantage in the time of David Ricardo to the modern world of today! Workers at the time of Ricardo who were engaged in so called foreign trade were not much better off in respect to one another, more or less. In todays modern world, there are great differences between the workers of the first world and the third world! And when you allow the capitalist corporate pigs to carry off our factories to third world countries, you are essentially allowing them to export unpaid for surplus labour back to the originating country, got it? Talk about adding insult to injury! Ponder that for a moment! And soon your first world country will be transformed ever so slowly to a third world country! Don't believe me? Just ask anyone that lives in say Windsor, Ontario...

Working through another problem....

The second fallacy is very similar to the first, but very subtle, I call it the fallacy of Proportion Displacement. Free trade between similar countries of social development will more or less work pretty well. But so called free trade between a first world country and a third world country is a total rip off for the citizens of the first world country, and the citizens of the third world country. The only ones that really laugh all the way to the bank coming and going are the right wing economists and the global corporate whores, of no fixed address.
Now the Oracle of Ottawa has a solution to these two newly discovered fallacies. See my blog post entitled "A Gold Standard For the Rest Of Us". (Not a neo-con rant...) Totally solved it didn't I? And by the way, it was not Karl Marx who first coined the concept of surplus labour, it was Adam Smith! Can you find the exact reference in The Wealth of Nations?  No? Some economist you are!
        

Now watch this carefully and then read the above text again...