A Terrible Blogger is Born!

March 29, 2009

Is Mises.org stealing my metaphors?

Filed under: Contra Keynes,Economics — rmangum @ 8:07 pm
Tags: , ,

No, probably not, but I should point out that I came up with the comparison of Keynesian stimulus to a perpetual motion machine weeks before William L. Anderson published his article, “Is the Economy a Perpetual Motion Machine”. It’s a fairly obvious comparison, really. He also explains the fallacy a lot better than me, so do yourself a favor and read the article.

Keynesianism is full of mechanistic metaphors of engines and hydraulics. I also compared the phenomenon of staglflation within that metaphorical system to a car that is simultaneously slowing down and speeding up- it should be impossible.

Here’s another comparison I’m particularly proud of. Keynesian policy insists that if aggregate demand falls, producers should not scale back or close up shop, but rather the government should pump them full of funny money to keep them going. Does this not mean that we are to serve a preconceived, ideal structure of production, rather than having it serve us? Does it not make a fetish of ceaseless GDP-growth at the expense of actual human desires? (There are a number of problems with GDP. Austrian economist and stockbroker Peter Schiff has pointed out that since GDP only measures expenditures, from government boondoggles and make-work schemes, to the inflated bubble-prices of the modern equivalent of tulipomania in the private market, much of GDP represents, not wealth-creation, but wealth-destruction. And Kevin Carson has challenged the most-cited of economic statistics vis-a-vis actual quality of life: “We often hear that the per capita GDP in Italy or Ireland is a fraction that of the U.S., and yet the actual quality of life doesn’t seem to be anywhere near that small a fraction of our own. The reason is that much of our increased GDP results, not from a proportionate increase in the value of the goods and services we consume, but from the increased ratio of overhead cost to the value of what we consume. Suppose we decided we could meet our need for bread by baking it in our own ovens, or producing some other good in the household to exchange with a neighbor’s bread, with a fraction of the hours of wage labor required to buy it. Suppose we decided that we could meet a major part of our needs through such informal and household production, and non-monetized exchange through a neighborhood or community barter network.  The portion of GDP resulting from that wage labor and the purchase of those store goods would simply disappear.  But our quality of life would be improved.”) And it is the free market that is supposed to attend to mere “materialistic” pursuits at the expense of loftier spiritual interests? How is it that few have called this an absurdity on its face? I am reminded of Chesterton’s critique of his friend and intellectual sparring-partner George Bernard Shaw’s ideas of progress:

Having come to doubt whether humanity can be combined with progress, most people, easily pleased, would have elected to abandon progress and remain with humanity. Mr. Shaw, not being easily pleased, decides to throw over humanity with all its limitations and go in for progress for its own sake. If man, as we know him, is incapable of the philosophy of progress, Mr. Shaw asks, not for a new kind of philosophy, but for a new kind of man. It is rather as if a nurse had tried a rather bitter food for some years on a baby, and on discovering that it was not suitable, should not throw away the food and ask for a new food, but throw the baby out of window, and ask for a new baby.

Anyway, I continue to rely on the Mises Institute and the Austrians (supplemented by a few rabble-rousers like Carson) for the economics, while concentrating my own efforts on literary conceits.


1 Comment »

  1. […] for they will never (barring a crisis, which may be forthcoming) change for ours. For instance, I wrote a couple of months […]

    Pingback by Modern Procrustes, or consumerism is too important to be left to the consumers « A Terrible Blogger is Born! — June 17, 2009 @ 4:55 am | Reply

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