nvm

[Cutlass]

Comments time! Feel free to mock or ignore.

Though I'll note that we should be modest about our claims to the effectiveness of monetary/fiscal/regulatory interventions in the economy. There's only one method to even remotely manage an economy technocratically - monetary policy - and even that eventually can only steer nominal variables (the money supply, prices, inflation, nominal spending, etc), not real ones (specifically, real spending). Fiscal and regulatory policy are only modestly able to tame real business cycles, and the timing is usually hard to get right.

"This time it's different", except that it is and it isn't. There is no perfect policy because there are both samenesses and differences in every situation. So there is to some extent always a play it by ear and react to the situation as it develops. Part of what the Keynesians failed at that resulted in them being discredited was excessive confidence that they had all the answers. But everyone else that did marco had the same failures at some point. Including the laises fairies. You do the best you can with what you have. Sometimes you'll be wrong, but it's pretty much always better than doing nothing.

Further, regulatory and fiscal policy can themselves create business cycles, but that's a discussion for another day.

If you read the discussion above, I never denied it:

Of course they are. Now I'm not going to claim that other factors, government missteps, wars, natural disasters, don't also do so. But financial bubbles and bursts are an inherent part of capitalism. You can't have one without the other. You can only attempt to reign them in and mitigate the damage.

Of course, the business cycle has been found to cause sunspots too...

A decent reference here might be Friedman's "The Methodology of Positive Economics", which isn't the best defense of economics but is good enough for this discussion.

I find the "Oh, that's not proven beyond the least possibility of dispute, therefor it's meaningless and we'll ignore it" response to be singularly lacking in credibility. And that's what I was referring to above. Same thing often heard from climate deniers, smoking risk deniers, pollution cost deniers...

While there's certainly some theoretical validity, it's all too often an excuse for people to go on doing whatever the hell they want without taking responsibility for their actions.

I'm not sure you can make the causal claim that deflation -> depression under a gold standard, but I'm having trouble raising a counterexample. Consider this an "I'll get back to this, if you'd like" marker.

"Strongly associated"

No one has proved this. There is only arbitrary interpretations of history, just like yours here. One could interpret in a million other manners and they would be just as much speculation. There is no scientific value in that.

What's your standard of proof? You can rationalize away and shift the blame all you want. But while it is true that sometimes the government is in the wrong, there's no plausible way to say that there isn't a business cycle caused by, you know, business.

Without knowing facts (person A prefers having money supply manipulated in manner B or doesnt) it is impossible to know. And as those persons arent acting(as it is an externality), it is impossible to know the facts. Speculation.

People express their preferences through choice of government.

Same thing.

You keep making the same methological mistake of using positivism in social sciences. That necessarily means giving up scientific value.

And you don't? You don't have the smallest lick of science behind any of your points. You begin with your conclusions and then look for a way to justify them. You aren't following a scientific method, because evidence is meaningless to you.

 

[Naskra]

1) The Fed can indeed raise and lower the nominal interest rate. It does so by using its immense market power in the bond markets. Through this it can also affect the real interest rate. The Fed's control of the real rate depends on people's expectations of inflation; thus, the hold on the real rate is tenuous at best.

Indeed the fed can raise rates, but there is an upper limit (disregarding the debasement premium now called "managing inflation expectations"). That limit is what the rate would be absent any fed
actions. The fed as a buyer of securities has bottomless pockets, and can drive treasury yields down as far it pleases, effectively making banks an offer they can't refuse. As a seller, though, it is constrained by it's supply and by how much the market is willing to accept. (I am speaking of the old, pre-2008 Fed, of course). So the Fed can inject money into banks at will, lowering interest rates, but can't extract money from them against their will, at least not without being wildly infationary. Hence, long term, the Fed is a net buyer, and an interest rate suppressor.
In essence, it's just a bank with infinite reserves that lends to it's preferred clientele at below market rates - an inflation machine. And, long term, any monetary policy is a one way street.

 

[Cutlass]

but can't extract money from them against their will, at least not without being wildly infationary

Extracting money is deflationary, not inflationary. And the Fed can in fact extract money from the system. You'll be seeing a great deal of that in the next few years.

Don't forget that in the start of the 80s the Fed drove interest rates to 20%. They can do so again at will.

For the rest, of course the money supply constantly increases over time. The economy and population does, so the money supply must. If it did not, as for example under a gold standard, then the cost of money would be driven too high for most people to use. Interest rates would simply be too high for ordinary commerce. The lower and middle classes would be driven into abject poverty.

 

[aelf]

Classical liberalism doesn't put all too much emphasis on equality if I remember. Sure, equality is preferable to inequality but only insofar as equality doesn't infringe on liberty. That's pretty much Hayek's line too.

Rawls was interested in justice rather than liberty per se. That's why he doesn't regard some liberties as basic liberties, such as those concerned with the ownership of property. But he shares liberal assumptions about human beings and most liberal values.

If we take Hayek as a neo-liberal, you'd be wrong. Hayek's liberalism is explicitly utilitarian. He spends half The Constitution of Liberty making utilitarian arguments for liberalism; That free civilizations are more creative, more productive and more progressive than unfree civilizations.

As you say, this idea certainly underpins Mill's liberalism. It does not underpin Rawls. How then can we call Rawls 'firmly liberal' whilst calling Hayek 'neoliberal'?

I wasn't really talking about Hayek there. My impression is that he is neo-liberal. But maybe he isn't or diverges from the people referred to as neo-liberals today. My points about neo-liberalism still stand, though.

 

[lovett]

I wasn't really talking about Hayek there. My impression is that he is neo-liberal. But maybe he isn't or diverges from the people referred to as neo-liberals today. My points about neo-liberalism still stand, though.

This is exactly the problem. Neoliberalism is a uselessly vague term. It's not a term of self-identification. It's not a term developed by impartial academic analysis. It doesn't refer to any coherent body of work or unique ideology. It's a neologism formed by critics of liberalism and applied haphazardly to modern-day liberals. It doesn't bind them together in any way more precise than would be achieved by the term 'classical liberal'. It's just a way of saying 'classical liberal post 1970s'. Asking for an actual definition of neo-liberal is pointless because it doesn't mean anything distinctive.

I think our discussion over Hayek and Rawls is a good example of this. You immediately identified Hayek as a 'neoliberal'' and Rawls as a 'classical liberal'. That's because the term neoliberal is vacant. Fundamentally Hayek is classically liberal in every meaningful sense. His arguments directly parallel those of 19th century liberals. In contrast, Rawls uses some very different arguments. His liberalism is rather distinct. The only proper use of 'neo-' in this case is to define time period; It says nothing about ideological content or prescription. That's why 'neo-liberals' are very happy calling themselves classical liberals. One wonders why one would do this if ones ideas were distinct and superior (in their own eyes) to those of classical liberalism.

 

[aelf]

This is exactly the problem. Neoliberalism is a uselessly vague term. It's not a term of self-identification. It's not a term developed by impartial academic analysis. It doesn't refer to any coherent body of work or unique ideology. It's a neologism formed by critics of liberalism and applied haphazardly to modern-day liberals. It doesn't bind them together in any way more precise than would be achieved by the term 'classical liberal'. It's just a way of saying 'classical liberal post 1970s'. Asking for an actual definition of neo-liberal is pointless because it doesn't mean anything distinctive.

It doesn't seem to be regarded as a useless term by everyone else here. If you are right, I could as soon say that socialism is a uselessly vague term. But, personally, I don't think it's useless as a term, even if it's vague.

I think our discussion over Hayek and Rawls is a good example of this. You immediately identified Hayek as a 'neoliberal'' and Rawls as a 'classical liberal'. That's because the term neoliberal is vacant.

I find it strange how, at the same time, your argument relies on presumptuously identifying me as someone who has made some presumptuous identifications as the basis for my argument. I did think Hayek was a neo-liberal -- that was my approximation of the truth, which could be further refined. But whether he is or isn't really has little bearing on what I said about the potentially important distinctions between what is known as neo-liberalism and other liberal schools.

But what makes your presumption clearly presumptuous is your assertion that I identified Rawls as a classical liberal. I never did that. Clearly, Rawls wasn't a classical liberal since he has a much more egalitarian focus, which he arrived at through his refining of traditional liberal assumptions and values.

Rawls and a neo-liberal are (perhaps) both liberals. However, neither are classical liberals and there are important distinctions amongst all of them.

In contrast, Rawls uses some very different arguments. His liberalism is rather distinct. The only proper use of 'neo-' in this case is to define time period; It says nothing about ideological content or prescription. That's why 'neo-liberals' are very happy calling themselves classical liberals. One wonders why one would do this if ones ideas were distinct and superior (in your own eyes) to those of classical liberalism.

To put this in context, Carl Schmitt called himself a liberal.

I think there are very good reasons to believe that neo-liberals aren't simply classical liberals. I think the description Masada provided is a rather good one, even if we can't come up with a definition of neo-liberalism. Certainly, neo-classical economics is distinct from classical economics, and if we are to understand neo-liberalism as chiefly to do with the advent of the former, then we have to admit that neo-liberalism arose on a basis that is different from classical liberalism. That they use concepts from classical liberalism to support their position hardly means that they are the same as classical liberals.

 

[lovett]

It doesn't seem to be regarded as a useless term by everyone else here. If you are right, I could as soon say that socialism is a uselessly vague term. But, personally, I don't think it's useless as a term, even if it's vague.

It's a useless term because it is almost completely congruent with classical liberalism. There are differences in economic prescription but these aren't axiomatic differences. They're just developments of classical economics. My objection is that the term is used to refer to anyone who is both economically and socially liberal. That's redundant; liberal or classical liberal covers them already. The term was invented as an insult and I can't think of anyone who self-identifies as neoliberal. When a word is meant to refer to some ideology and that ideology doesn't exist distinctly it's fair to say that that word is largely useless.

In contrast, Socialism wasn't intended as a pejorative label. Many people identify as socialist and there are distinct ideas and concepts supporting socialism. Your first post in this thread asked for a definition of neoliberal. Asking for a definition of socialist is sensible. People can answer that. Socialist themselves can answer that. Asking for a definition of neoliberal is more like asking for a definition of 'socialist slave' as a significant ideology. The ideological part is completely covered by liberal and socialist respectively. All the rest is just propagandising.

I think there are very good reasons to believe that neo-liberals aren't simply classical liberals. I think the description Masada provided is a rather good one, even if we can't come up with a definition of neo-liberalism. Certainly, neo-classical economics is distinct from classical economics, and if we are to understand neo-liberalism as chiefly to do with the advent of the former, then we have to admit that neo-liberalism arose on a basis that is different from classical liberalism. That they use concepts from classical liberalism to support their position hardly means that they are the same as classical liberals.

Neo-classical economics is generally dated from the 1870s onwards. It is a direct development of classical economics. It isn't really right to say that it arose from a different basis than classical economics because its basis largely is classical economics. The fact is we don't understand neoliberalism as chiefly to do with the former. The time frames don't match and if we did the term neoliberal would be adequately covered by neo-classical economics. It's not because neoliberal is used as if it referred to a coherent and distinct political ideology, including the social aspects of society. 'Neo-liberalism' simply isn't a distinct ideology because it shares every presumption and prescription ideologies tend to make with classical liberalism. Given that, the fact that it was coined as a pejorative and nobody self-identifies as neoliberal should really put one off using the term in any serious cpolitical conversation. It's why it has no fixed definition and why you had to ask for a definition in the first place.

But what makes your presumption clearly presumptuous is your assertion that I identified Rawls as a classical liberal. I never did that. Clearly, Rawls wasn't a classical liberal since he has a much more egalitarian focus, which he arrived at through his refining of traditional liberal assumptions and values.

To quote:

it is used exclusively to refer to classical liberals.

John Rawls follows in the liberal tradition and is firmly a liberal. But I can't even imagine neo-liberals agreeing with him.

By 'firmly liberal' and 'liberal tradition' I assumed you were referring to classically liberal. Maybe that was a misinterpretation, but hardly an outrageous one.

 

[JerichoHill]

Not much to explain. Eliminate monetary policy, eliminate fiscal policy, and done.

Yeah, that would work well.

I'm not sure you understand Austrian economics, nor its place in modern economics, nor where it was wrong.

There is no theory that gets it all right

 

[aelf]

In contrast, Socialism wasn't intended as a pejorative label.

I wouldn't have known that if I only ever heard what some people say.

Many people identify as socialist and there are distinct ideas and concepts supporting socialism. Your first post in this thread asked for a definition of neoliberal.

I didn't really ask for a definition. I don't like to conflate things with each other, so I try to distinguish between a description and a definition.

Asking for a definition of socialist is sensible. People can answer that.

And people invariably get it wrong, even if they are right. That's why definitions are unreliable. But that doesn't mean the associated term is useless.

Asking for a definition of neoliberal is more like asking for a definition of 'socialist slave' as a significant ideology. The ideological part is completely covered by liberal and socialist respectively. All the rest is just propagandising.

So basically your main argument against the term is that it's emotive?

Neo-classical economics is generally dated from the 1870s onwards. It is a direct development of classical economics. It isn't really right to say that it arose from a different basis than classical economics because its basis largely is classical economics. The fact is we don't understand neoliberalism as chiefly to do with the former. The time frames don't match and if we did the term neoliberal would be adequately covered by neo-classical economics. It's not because neoliberal is used as if it referred to a coherent and distinct political ideology, including the social aspects of society. 'Neo-liberalism' simply isn't a distinct ideology because it shares every presumption and prescription ideologies tend to make with classical liberalism. Given that, the fact that it was coined as a pejorative and nobody self-identifies as neoliberal should really put one off using the term in any serious cpolitical conversation. It's why it has no fixed definition and why you had to ask for a definition in the first place.

Wait. In the first bit are you trying to argue that neo-classical and classical economics are indistinct? I'm pretty sure the economists here would disagree with you, if that is the case.

Otherwise, as I said, I can accept a description of neo-liberalism as broadly motivated by neo-classical economics above and beyond classical liberalism. So maybe you're right that neo-classical economics is really almost the same as neo-liberalism. However, I'm pretty sure that neo-liberalism extends the conclusions of neo-classical economics into the political and social spheres, which makes it not exactly the same.

For the reason that I see neo-liberalism as closely associated with neo-classical economics, I never said that neo-liberalism is a coherent and distinct ideology (in fact, I doubt that it's coherent, even if it's distinct, partly because this rather narrow basis). How many times have I said that neo-liberalism is one branch of liberalism? Neo-liberalism does share a lot of important premises with classical liberalism, which is why it is part of the large liberal movement. However, I'm not sure that classical liberals would go so far as to prescribe the things that neo-liberals prescribe, and I'm sure there is a reason for that.

Anyway, you seem to be reacting to a position that is quite specific but that I'm not sure of (for one, I don't think neo-liberal is a pejorative label, though it does have rather distasteful implications from my perspective), and on top of that I don't agree with what you're saying. For example, the term Communitarian is almost never acknowledged by certain critics of Rawls' theory of justice, who come from diverse schools of thought. But the label still applies as they share a broadly similar approach to criticising Rawls' theory, even if they have wildly different bases for doing so.

Whether an author actually intends to portray himself in a certain fashion cannot have an absolute bearing on how he might be seen.

By 'firmly liberal' and 'liberal tradition' I assumed you were referring to classically liberal. Maybe that was a misinterpretation, but hardly an outrageous one.

No, I don't conflate all liberal schools with classical liberalism. I'm aware that they might have significant differences.

And "follows in the liberal tradition" is just a way of saying that he shares some important liberal values and premises.