I’m intrigued by responses like this, to which I was directed by Tim Lacy of USIH (thanks, Tim), because they sound so reassuringly rational, and yet indulge–indeed are predicated on–the kind of blind faith great religions are made of.
This is from the website “Cafe Hayek,” I’d give you the URL or whatever it is if I knew how. Fuck that for now.
Vulgar Keynesianism on Steroids
by DON BOUDREAUX on OCTOBER 26, 2011
in DEBT AND DEFICITS, GROWTH, MYTHS AND FALLACIES, SEEN AND UNSEEN, STATE OF MACRO, WHAT’S WRONG WITH THE COUNTRY
Here’s a letter to the New York Times:
James Livingston rightly proclaims “the moral worth of consumer culture” and correctly notes the trivial fact that increased savings do not automatically result in increased and widespread prosperity (“It’s Consumer Spending, Stupid,” Oct. 26). These points, however, are inadequate to support his conclusion that economic growth is driven overwhelmingly by consumer and government spending, and that “[p]rivate investment isn’t even necessary to promote growth.”
Such an astounding conclusion requires a potent argument. But Prof. Livingston delivers only a storm of feeble anecdotes, post-hoc fallacies, and non sequiturs.
An example of the latter is his observation that “Between 1900 and 2000, real gross domestic product per capita (the output of goods and services per person) grew more than 600 percent. Meanwhile, net business investment declined 70 percent as a share of G.D.P.” Yep. But this fact does not remotely mean that “net business investment atrophied” or that it plays no crucial role in economic growth.
Because each dollar successfully invested raises G.D.P. by multiple dollars, net-investment’s decline as a share of rising G.D.P. (and not, please note, absolutely) is evidence of the impressive success of private investment rather than of the proposition that economic growth requires only “[c]onsumer debt and government spending.”
Donald J. Boudreaux
An astounding conclusion? That net private investment has atrophied? I’m by no means the first person to notice the phenomenon, nor the first person to contemplate the consequences–just to begin with, see Simon Kuznets, Capital in the American Economy (1961), and the economists I cite in the Introduction and the Appendix to my new book. But here’s the thing: this guy says, sure, you can measure the earth’s movement vis a vis the sun, but the earth is still the center of the universe, otherwise god is dead. Net investment has in fact declined (“Yep”), but that just goes to show you that it’s more important than ever! God’s providence is utterly inscrutable, but that only means we have to redouble our efforts to understand it.
Another faith-based initiative, I’d say. Why not call it theology? My son, god has died–capitalism ain’t what it used to be, and indeed is in such a sorry state that your faith won’t suffice. You’re going to have to do better than bluster.
Maybe the problem here is just this–Left or Right, none of us likes the idea that we’re going to have to take responsibility for the future. We’ve lived to see the collapse of capitalism (Du Bois said this in 1940!), but now what? You mean we’re in charge of this thing? We can’t blame the oligarchs anymore? Big banks, big government, blah, blah, all the shibboleths are now worthless?
Well, yeah. From here on in, we can’t fall back on faith or, what is the same thing, antiquated political reflexes. We need to get more agile, more mobile, more flexible, more interrogative, in our thinking–like OWS! Fuck Marx, Keynes, and Hayek, too. I admire all three, but our goal is not to prove them right. Our goal is to make a world we want to live in, as Justin Cox/Kray La Soul suggests so eloquently in Occupy Wall Street VIII above.
This is not guerilla war, but it is guerilla theater. Let’s play our parts.